Dutch households are putting more and more money in bank accounts abroad, according to the latest quarterly figures from DNB and the ECB. Countries where savings rates have recently risen are particularly popular among Dutch savers.Read more
Size and breakdown of the mortgage market
The charts below show the development in the size and breakdown of residential mortgage loans on the balance sheets of financial institutions in the Netherlands.
Mid-2023, Dutch households collectively had over €803 billion in mortgage debt outstanding with Dutch financial institutions (Chart 1). This is up 23% from a decade ago. Relative to GDP (Chart 2), mortgage debt outstanding at Dutch financial institutions decreased from 100% in early 2012 to 80% mid-2023. We do not collect data on residential mortgage loans of Dutch households outstanding at foreign mortgage providers.
Banks are the biggest players in the Dutch mortgage market. Mid-2023, they accounted for more than €555 billion in outstanding mortgage loans, or 69% of the total volume.
Bank mortgage lending increased sharply from the 1990s until the credit crisis. Besides strong income growth, some structural factors also contributed to the increase in lending during this period, such as:
- Increase in the number of households
- Increase in the number of dual earners
- Easing in credit underwriting standards
- Mortgage products that carry no or a limited repayment obligation before maturity
Leaving aside the COVID-19 period, growth in bank mortgage lending has been weak since the credit crisis. Factors that have dragged growth include restrictions on tax-deductibility for new interest-only mortgage loans and the fact that capital repayment has generally become more popular among households.
Another cause of the limited growth in bank mortgage lending is the fact that institutional investors – pension funds, insurers and investment funds – have been gaining market share for several years. Whereas banks were responsible for the growth in Dutch mortgage debt seen in the past few decades, most of the growth seen since 2014 is accounted for by institutional investors. Mid-2023, institutional investors had more than €160 billion in mortgage loans on their balance sheets (16% of GDP), making them the second largest mortgage lenders after banks.
Other financial institutions
By contrast, other financial institutions (OFIs), which largely consist of finance companies and securitisation vehicles, have seen a downward trend. The decline is related to banks securitising fewer residential mortgage loans on the one hand, and stricter accounting rules on the other, which increasingly require banks to leave securitised residential mortgage loans on their own balance sheets. As a result, they are not counted under OFIs. Higher investment in residential mortgage loans by institutional investors also contributed somewhat as they securitise fewer mortgage loans. Mid-2023, this left more than €87 billion in residential mortgage loans on OFIs' balance sheets, representing a decrease of almost 53% from 2012.
What are securitisations?
Securitisations involve the bundling of loans extended to households and businesses, which are then repackaged and sold as bonds through dedicated securitisation firms. In the Netherlands, these involve predominantly residential mortgage loans. This frees up funds for the original lenders, such as banks, so they can provide new loans.
Dutch institutional investors such as pension funds, investment funds and insurers kept their investments in risky bonds roughly the same over the past 12 months. This is a break from previous years: since 2019, large investors had expanded their exposure to what are termed high-yield bonds.Read more
In October the ECB did not raise its rates for the first time since the summer of 2022. This does not mean that the effects of tighter monetary policy have already worn off, however.Read more
Topics residential mortgages
Size and breakdown of the mortgage market
The development of the size and distribution of residential mortgages on the balance sheets of financial institutions in the Netherlands.Navigate to dashboard about Size and breakdown of the mortgage market
Bank mortgage lending rates
The average interest lending rate on new mortgage loans taken out from banks has been trending down in recent years.Navigate to dashboard about Bank mortgage lending rates
Mortgage supply and demand (Bank Lending Survey)
The trends in demand for residential mortgage loans based on a survey conducted among Dutch banks.Navigate to dashboard about Mortgage supply and demand (Bank Lending Survey)