Upgrading Journey: 02
The Bridging Loan
An Overbruggingshypotheek is the financial bridge between two houses.
How it works
If your current house is worth €500k and your mortgage is €300k, you have €200k in "paper equity." To use that €200k for the down payment on your new home before the old one is sold, the bank gives you a temporary loan.
Loan Limit
Usually 90% of the appraised value (if not sold) or 100% (if already sold subject to conditions), minus your current mortgage.
Interest Only
You only pay interest—no principal repayment. This interest is also tax-deductible (HRA).
Important Requirments
- Double Appraisal: Both your old home and your new home must be appraised (taxatie) by a certified appraiser.
- Proof of Income: You must prove you can afford the interest on both mortgages plus the bridging loan for a certain period (usually 12-24 months).
- Execution: The loan is repaid immediately the moment your old house is transferred at the notary.
The Risks
The biggest risk is that your old house doesn't sell as fast or for as much as you expected. Most banks have a maximum duration for bridging loans (usually 2 years). If it hasn't sold by then, you may be forced to lower the price significantly.