Rising mortgage rates are cooling the Dutch housing market — but don't expect a crash

If you're an expat hoping to buy a home in the Netherlands, here's the situation in one sentence: mortgage rates are climbing again, the market is cooling, but prices are not about to tumble — because there still aren't enough homes to go around.

That's the takeaway from new forecasts by ING and comments from housing economists who spoke to the Financieele Dagblad (FD) this week. For internationals navigating the Dutch housing market, the practical question is what these trends mean for your budget, your bidding strategy, and your timing.

Why mortgage rates are rising (and what it costs you)

The average interest rate on the most popular mortgage in the Netherlands — a 10-year fixed rate with the National Mortgage Guarantee (NHG) — has climbed to 4.11 percent, the highest level since December 2023. At the start of 2026, it was still 3.84 percent. Rabobank and ABN Amro have already announced new increases, and mortgage advisor group Van Bruggen expects more big banks to follow.

The driver? Geopolitics. The blockade of the Strait of Hormuz has pushed up oil and gas prices, stoking inflation fears and driving up interest rates on capital markets. Banks base their long-term mortgage rates on those capital market rates, so when global uncertainty rises, your mortgage gets more expensive. “The conflict in the Middle East is very volatile,” Rabobank housing market economist Stefan Groot told FD. “We move from optimism to pessimism and vice versa.”

For buyers, the effect is straightforward: higher rates mean you can borrow less, and therefore bid less. But Groot and others stress that this will not translate into falling prices. “We have entered a period of very moderate price increases,” he said.

More homes for sale — but not a buyer's market

One notable shift is the sharp rise in the number of homes for sale. ING points out that listings via NVM estate agents have more than doubled in five years, from 18,000 to 37,000 homes. Despite record sales, there are now more homes on the market than are being sold — something that has only happened twice in the last century outside crisis periods, ING notes.

The supply is growing for different reasons depending on where you look. In urban areas, it's largely driven by investors selling rental properties, squeezed by government tax measures. An estimated 40,000 rental homes were sold last year — roughly one in six existing homes sold nationwide, and as many as one in three in the four largest cities. In rural areas, the increase often comes from elderly homeowners selling up, while holiday homes are also being offloaded due to unfavourable tax treatment.

Yet ING's economists are clear: “The buyer's market is still too tight” for prices to actually fall. They expect prices to rise 2.5 percent this year and just 1 percent in 2027 — a slight downgrade from their July forecast.

What the September budget means for you

In last week's Budget, Housing Minister Elanor Boekholt-O'Sullivan announced a package aimed at boosting supply. The headline: a massive investment in large-scale new-build developments, plus an extra €100 million for a fund to help first-time buyers get on the ladder.

The government also confirmed plans to cut the property transfer tax for investment properties and holiday homes from 8 percent to 7 percent — a move designed to encourage investors to keep renting, though critics say it's too little, too late. For owner-occupiers, the tax remains 2 percent.

What's missing? Any change to the mortgage interest deduction. The government left it untouched, though a slight rise in income tax in the first two tax bands will have a minimal impact on your rebate.

For expats specifically, Matthijs van der Heijden of Expat Mortgages, which has been helping internationals buy in the Netherlands for over 20 years, sees some silver linings. “Plenty of investment in large scale developments of new homes, so if you are looking for a new-build property, you could be lucky — although the changes will take time to filter through,” he told DutchNews.nl. He also notes that buyers are starting to see “a little bit of room for negotiation,” and some are even getting a second viewing before deciding whether to bid.

The practical takeaway

If you're planning to buy, don't wait for a price crash that isn't coming. The housing shortage remains structural, and even with more listings, demand still outpaces supply. What has changed is your negotiating position: you may be able to bid under the asking price, ask for a longer inspection period, or include a financing clause.

But with rates expected to keep rising in the short term, locking in a rate now — or at least getting pre-approval — could save you money. And if you're eligible for the first-time buyer fund, or eyeing a new-build project, the government's budget measures are worth investigating, even if the effects won't be felt overnight.

In short: the Dutch housing market is cooling, not crashing. For expats, that means less frenzy, more choice — but don't expect bargains to fall into your lap.

Sources: NL Times, DutchNews.nl, NL Times