Home equity withdrawal

Home equity withdrawal

What to do with the surplus value in your home? Many people with owner-occupied homes have accumulated a nice profit in recent years due to the persistently positive housing market. This creates options to do something with that surplus value. In this article, we explain your options for withdrawing this surplus value with a mortgage.


Why withdraw surplus value?

You cannot just spend surplus value. It is ‘stuck in the bricks’ of your home and will only be released when you sell the property or take out a mortgage on the collateral.

Yet many people want to withdraw their surplus value now, while continuing to live in their home. For example, to buy a holiday home in Spain or a second home to rent out, finance a major renovation or spend the surplus value on something completely different such as a camper van or boat or alternative investment.

Do you want to cash in on your surplus value? Then we have good news, because there are several options for that!


Mortgage increase

The most common way to liquidate surplus value is by increasing your mortgage. Raising it privately is the cheapest, as you won’t have to visit the notary. But if you run out of room within your mortgage registration, you can also take out a second mortgage. In both cases, you can then withdraw the surplus value.

This will involve retesting your income and taking stock of your debts, just like when you took out your first mortgage. Please note that additional rules apply to over-57s that affect your maximum mortgage amount.


Switching and taking out a new mortgage

Ending your current mortgage early and taking out a new mortgage is called refinancing. To cash in your surplus value, you take out a higher mortgage than your current debt. You can then withdraw the remaining amount. The same rules and exceptions as described above apply here.

Now that mortgage interest rates are so low, it may be more attractive to transfer instead of increasing your mortgage – despite the penalty interest you have to pay on this. Wondering if this is the case for you? Contact us for a no-obligation survey.


Top-up mortgage

A top-up mortgage (also called: cash-in mortgage) is a loan that allows you to have the surplus value on your house paid out. Monthly or all at once. The amount borrowed and the interest due are then added to your mortgage. In fact, your home then becomes more and more the bank’s and less yours.

Especially for seniors with a high surplus value combined with a low income, this is a popular way to supplement retirement income.

Unfortunately, only a few banks offer top-up mortgages. At the time of writing, they are Rabobank, ABN AMRO, Florius and SNS.


Credit mortgage

With a credit mortgage, you have a revolving credit with your house as collateral. Up to an agreed amount, you can flexibly withdraw money and redeem it penalty-free. The disadvantages are that the interest rate is variable and often a lot higher than with a normal mortgage.

Currently, only a few banks still offer this form of mortgage. These are Woonfonds and SNS.



Stimuleringsfonds Volkshuisvesting Nederland (SVn) offers the Verzilverlening. Especially for 57-plussers who would like to grow old in their own home. This loan may only be used for renovations to make living more comfortable, sustainable and safe and may not be used for other purposes.

You do not have to pay any interest or repayment on the Verzil Loan. The debt is collected only when the house is sold or after the death of the surviving spouse. Unfortunately, this loan is currently issued in only a few municipalities.


Selling the house and renting it back

Also not the most obvious construction, but potentially interesting: by selling your house and then renting it yourself, you can withdraw not only the excess value, but the entire value of your home. Minus the part still open on mortgage.

Nowadays, there are more and more commercial parties offering a sale and lease back construction. Do take into account a substantially lower sales value, not counting overbidding. Selling normally and renting another property is much more attractive financially.


Points of attention

  • Interest deductibility: You cannot claim interest deduction for every purpose of withdrawing surplus value.
  • Same lender: For a second mortgage, you need to apply for it with the lender where the first mortgage runs.
  • Income test: For a regular mortgage increase, an income and asset test should be done.


Tell us your story!

Want to know how you can qualify to leverage surplus value with a mortgage? Then schedule an online introductory meeting with us.

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