Which suits your situation better: buying or renting? That depends on several factors. At least ask yourself the following questions when choosing between renting or buying.

1. What is my age?

Are you under 35? Then, you could be exempt from paying transfer tax. This saves you a tax of 2% of the purchasing price of the house. And you’d need much less savings to be able to buy. Of course, some additional rules apply. For example, you can only use this exemption once in your life, and the purchasing price is maximised (to € 510,000 in 2024).

Are you within 10 years of the retirement age? Then, consider your current and future income. Can you still afford the rent or the mortgage after retirement?

Rent of buy?

2. For how long do I plan to live in the house?

The main benefit of a rental property is the flexibility to cancel the rent and move out when you want. Are you planning to move abroad soon? Then, you only need to terminate your rent and you can move out without any obligations.

With a purchased house, it generally takes more time to sell and move out. If you plan to live in one particular city or neighbourhood for a longer period of time, a purchased house might be the preferred option. Also, consider that you cannot just (temporarily) rent out your purchased house.

3. How much savings do I have?

For a purchased house, you need a substantial amount of savings (or financial help from family): you have to pay some costs out of pocket. For a rental property, you often need less savings. The deposit for a rental is usually lower than the up-front costs associated with buying a house.

4. How stable is my income?

Lenders prefer a predictable income. They also check whether you have debts registered with BKR, as this affects your disposable income. And you must declare any student loans. Landlords also pay attention to this but they are often more lenient in their conditions.

5. In which region do I want to live?

It’s becoming increasingly difficult for first-time buyers to buy a house in big cities. Overbidding has become very common due to the tight housing market. In some areas, the situation is less difficult and you might have a better chance of buying. Bidding above the asking price has become more a rule than an exception, and many starters don’t have the means for that. Looking outside the most popular areas, this issue still plays a smaller role in certain places.

While buying a house can be difficult in some regions, renting is not easy either. Social renting homes could be scarce and the waiting lists could be long. Private renting can be expensive if you’re able to find something anyway. When you consider moving to another area, it can be wise to start renting before you consider buying. Once you know your new environment well enough, you can determine where exactly and for which price you are willing to buy.

6. Do I qualify for social housing?

If your income qualifies you for social housing and thus for rent allowance (huurtoeslag), you can keep your housing costs relatively low. The problem is that you must have been registered with a housing association for a very long time in order to be assigned a house in many regions.

7. How much maintenance does my dream house require?

Do you already have a particular house in mind? Then, also investigate how much maintenance is needed. Are you willing to pay for this? When you buy a property, you might have the option to take out a higher mortgage in order to be able to pay for required maintenance. When renting, the landlord is responsible for maintenance and reparations.

8. Will the interest rate drop further?

Mortgage rates can change over time. Predicting whether they go up or down is of course very difficult. If you think the interest rate will go down, it might be advantageous to wait a bit longer before buying. If it goes up, you’ll face higher monthly costs in the future.

9. What will the housing market do?

We can predict that the tight housing market may continue until demographics change or when enough new houses are available. This scarcity probably drives up the prices of properties, and rents (in the private sector) are also still rising.

Once you own your new house, you might be happy with any increase in its value. However, prices can also go down. So make sure that if the housing market turns around, you are still happy to live in your home at affordable costs.

Calculate what’s more advantageous for you: renting or buying?

Finally, calculate in advance what’s most cost-effective for you at the moment. Could you also afford a mortgage with the rent you’re already paying?

A calculation example

A rental property in Amsterdam easily costs you € 1,600 rent per month.

With the same amount, you can finance a purchased house:

If you take out a mortgage of € 500,000, at a mortgage interest rate of 4.0% and with a repayment period of 30 years, then the monthly cost of your mortgage is € 2,387. After tax returns, you will pay about € 1,900 net.

Of that monthly cost, about € 720 is intended for the actual repayment; the rest goes to the interest you pay to the lender. So, you’re not “losing” that € 720; you’re building equity with it. When deducing this from your payments by seeing it as ‘wealth accumulation’ you’d be paying about € 1,200 + maintenance and insurance while renting costs € 1,600.

Also, think about which monthly amount you would be maximally comfortable with. Can you buy something that meets your requirements for that amount?

In an exploratory conversation at Viisi, your advisor will happily calculate what you can spend in your situation. You can estimate your maximum mortgage using the button below.

Calculate your maximum mortgage