Double mortgage

A double mortgage: not ideal, but sometimes you have no other choice. Think of the situation in which you want to renovate your new house, or in which you buy a newly built house. In the meantime, you'll still need somewhere to live. Are you looking for ways to ease your double expenses? Sometimes more is possible than you think. We will update you completely.

Go directly to:

• What is a double mortgage?
• When can you face a double mortgage?
• What are the options for paying a double mortgage?
• What if you cannot (continue to) pay the double mortgage?

What is a double mortgage?

A double mortgage is the situation where you have 2 different mortgages on 2 different properties. This involves dealing with double housing costs. Think not only of double mortgage costs but also a doubling of the rest of your housing costs: insurance, taxes, and maintenance costs.

Choose a double mortgage only if you have sufficient financial reserves or expect that you can quickly sell your old property. You can't just take out a double mortgage. Mortgage lenders conduct extensive research into your financial capacity. For example, they ask for proof that you can continue to pay the monthly costs of the old mortgage for at least 12 to 24 months.

Always seek advice from a financial advisor and/or mortgage advisor

Before you decide whether you want to take out a double mortgage, it is wise to seek advice from a financial advisor or mortgage advisor. These professionals help you assess your financial situation and find the best solution. They can also inform you about any tax benefits or financial risks and consequences of a double mortgage.

Mortgage advisors usually offer a free orientation meeting. There you can ask your general questions about a potential double mortgage. Want to know what to expect from the orientation meeting? You can read it in our article on the mortgage meeting.

Read more about mortgage advice:

Mortgage conversation

The costs of mortgage advice

Comparing mortgage advisors

When can you face a double mortgage?

There are various situations in which you may encounter a double mortgage. Below we list a few.

• You want to renovate or make your new home more sustainable
• You have found your dream home and acted quickly
• You had already sold your old home, but the sale was dissolved
• You sold your old home, but the transfer date has been moved
• You bought a newly built home

Want to avoid double housing costs as much as possible? Read our tips in the article on avoiding double housing costs.

You want to renovate or make your new home more sustainable

A double mortgage is common among people who buy a new house before selling their old home. Many people deliberately keep their old home because they want to renovate or make their new house more sustainable and do not want to be left without housing.

Renting temporarily is the alternative, but with the scarce rental supply and high rental prices, that is not a pleasant option for many people.

You have found your dream home and acted quickly

You can also be 'unintentionally' stuck with a double mortgage because you found your dream home, and the purchasing process went very quickly. As a result, you did not have enough time for selling your own home.

You had already sold your old home, but the sale was dissolved

It may also be that you had already sold your home, but the sale was dissolved. For example, because the buyer does not comply with the conditions of the purchase agreement. Or because a dissolving condition arises, for instance, regarding financing, structural inspections, or obtaining permits.

There are also more possibilities for dissolving the sale, such as error, fraud, force majeure, and mutual agreement.

You sold your old home, but the transfer date has been moved

It can happen that the transfer date of your old home is moved, for example, due to delays in handling documents or other unforeseen circumstances. In the meantime, you have double expenses.

You bought a newly built home

If you buy a newly built home and already have your own home, you can also face a double mortgage. Developers often ask for payments in installments during the construction of the new house. To finance the construction costs, you can take out a double mortgage (provided you meet the conditions).

Double expenses with new construction

During the construction of the newly built house, you start repaying your mortgage. At the same time, you must continue paying the mortgage on the current house. You then face double expenses. This period can last quite a while, as new construction projects take an average of 6 months to 2 years.

Unfortunately, delays are also quite common in new construction projects. These delays can mean you deal with double expenses for longer than expected. Therefore, it is wise to have a financial buffer to cover these unexpected costs.

Pay mortgage interest from construction deposit

When buying new construction, you can also pay the double mortgage interest during construction from a construction deposit. This means that the interest is added to your mortgage amount, but you cannot deduct it. Always consult a financial advisor to investigate whether this is wise in your case.

When do you put your old home up for sale with new construction?

Is the new construction process already in full swing, and are you wondering when you can best put your old home up for sale? In our article on selling your house with new construction, you can read our advice. You will also read everything about the resale of a newly built house itself.

What are the options for paying a double mortgage?

Paying a double mortgage can be a challenge, especially if you do not have sufficient savings or financial help from loved ones (such as a tax-free gift from family). Fortunately, there are various schemes and alternative solutions that can ease the costs of double housing expenses.

• Tip 1: Utilize the double mortgage interest deduction
• Tip 2: You don't have to pay double imputed rental income
• Tip 3: Request a 'vacancy rate' from the energy supplier
• Tip 4: Explore the possibility of renting out the property
• Tip 5: Take out a bridging loan

Tip 1: Utilize the double mortgage interest deduction

With a double mortgage, you can often deduct the mortgage interest for both homes from your tax return. There are certain conditions for this. For example, you may not rent out one of the two homes. On the website of the Tax Authorities, you can read all about the different conditions and arrangements.

The double mortgage interest deduction applies from the moment you put your old home up for sale, up to 3 years after. This 3-year period pertains to calendar years. If you put your old home up for sale around the turn of the year, it is more convenient to choose a date in January. That way you truly 'benefit' from the double mortgage interest deduction for 3 years.

For newly built houses, this deduction applies during construction and 3 years after. After this period, the second mortgage moves to box 3, where the interest is no longer tax-deductible, but the debt can be deducted from the assets in box 3.

Tip 2: You don't have to pay double imputed rental income

If you own a home, the Tax Authorities add an amount to your income. This is called the 'imputed rental income'. This amount is a percentage of the WOZ value of your home and is a fictitious income from your own home. Normally, you pay tax on this amount unless you qualify for exemptions or deductions.

If your old home is for sale and you no longer live there, you do not have to pay imputed rental income. This also applies to a new house that is still under construction. In both cases, you only pay the imputed rental income for the other house.

In the year you move, you indicate in your tax return in which period you lived in which house. The 3 years after that, you only need to declare the imputed rental income of the house you live in.

Tip 3: Request a 'vacancy rate' from the energy supplier

Is one of the 2 houses vacant? For example, due to a renovation or a house that just won't sell? Then request a special 'vacancy rate' from the energy supplier. You then pay less for your energy contract, but there are still mandatory costs that you pay for the connection to the energy grid.

Tip 4: Explore the possibility of renting out the property

Are you looking for a way to ease the burden of your double mortgage? Temporarily renting out one of the two properties can offer a solution. Mortgage lenders are usually not eager when you apply to rent out the property. If they do cooperate, it is often with the condition that you rent out the property under the Vacancy Act.

Renting under the Vacancy Act

You can use the Vacancy Act if you cannot sell your property and are therefore at risk of financial problems. To use this act, you need approval from the municipality.

You may rent out your property under this act for 5 years under specific conditions. Tenants under this act do not have extensive rental protection. You can also cancel the rent within a few months if the house is sold.

Note: you lose the right to mortgage interest deduction for the property you rent out. Additionally, you pay wealth tax on the property value minus the mortgage debt. You do not have to pay tax on the received rent.

Read more about selling a rented house.

Tip 5: Take out a bridging loan

A bridging loan is a temporary loan that you can take out to bridge the period between the purchase of a new home and the sale of your current home. This can be useful if you have found a new home before you have been able to sell your old house and expect an equity surplus.

With bridging finance, you can get the necessary funding for the purchase of your new house until the sale of your old house is completed. You receive an advance, namely: a percentage of the expected equity surplus. When your old home is sold, the bridging loan is paid off, and you are only bound to the new mortgage of your new house.

Note: taking out a bridging loan is not without risks. If the sale of your old home is delayed, you may have double mortgage expenses for longer. Moreover, you may face a higher mortgage interest rate on the credit if the (often short) fixed interest period ends. And if the sale proceeds are lower than expected, a residual debt may arise. Therefore, always seek advice from a mortgage advisor or financial advisor.

Want to know more? Read everything you need to know on our page about the bridging loan.

Is it possible to finance double housing costs in your mortgage?

Yes, it may be possible to finance the double housing costs in an existing mortgage. This way, you can bridge the period in which your old home is not yet sold while you have already moved to your new home. Whether financing is possible depends on various factors. Think of your financial situation, the policy of the mortgage lender, and the conditions of your mortgage.

Financing double housing costs is different from taking out a bridging loan. In the first case, you finance both the costs of your old house and your new house with one mortgage. In the second case, you take out a temporary extra mortgage to bridge the period between the purchase of a new home and the sale of your current home.

What if you cannot (continue to) pay the double mortgage?

Cannot continue to pay the double mortgage despite the tips above? Always seek advice from a financial advisor and/or mortgage advisor. They inform you about the various options. Additionally, you can contact your mortgage lender to discuss the possibilities.

Although this is not what you want, sometimes there is no other option than to also put your new home up for sale. This increases your chances of a successful sale, so you can get rid of your double expenses.

Note: you may not immediately put your new home up for sale in all cases. There are new construction projects where it is not allowed to sell your home just before delivery. It can also happen that housing corporations impose restrictions on the sale of their homes, such as a minimum period of occupancy before the house may be sold.

Sell your house extra quickly?

Is there a lot of urgency in selling your old house? In our article on quickly selling your home, you will find several tips and options that you might not have thought of.

Read more about mortgages:

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The costs of a mortgage

Higher mortgage loan in 2024 for former students, singles, and energy-efficient houses

Mortgage: everything you need to consider when buying and selling your home

Buying a house without a mortgage: the pros and cons listed