Record High Mortgage Applications for Dutch Home Buyers in May 2025

Record High Mortgage Applications for Dutch Home Buyers in May 2025

The Dutch housing market reached a milestone in May 2025 as mortgage applications for home purchases climbed to 30,525—a new high for the fifth month of the year. According to the Mortgage Data Network (HDN), total mortgage requests in May hit 48,928, with 62.3% aimed at buying a property and 37.7% for refinancing or topping up an existing loan.¹ This surge underscores buyers’ eagerness to lock in favourable rates before anticipated increases and highlights ongoing shifts in both market demand and housing supply.

Why May 2025 Saw a Surge in Mortgage Applications

In early 2025, many prospective homeowners watched interest rate trends closely. After a period of gradual declines, mortgage rates sank to levels that made borrowing more attractive. With forecasts of further rate hikes on the horizon, particularly after the sharpest rise in 18 months earlier this year, buyers moved quickly to secure financing. This sense of urgency was especially pronounced among first-time buyers, who face growing competition and rising house prices in many regions of the Netherlands.

Comparing Year-on-Year Growth

The number of mortgage applications for home purchases rose by 27% compared to May 2024, a clear indication of renewed purchasing momentum. Key statistics for May 2025 include:

• Total mortgage applications registered by HDN: 48,928 • Applications for home purchases: 30,525 (up 27% year-on-year) • Applications for refinancing or top-ups: 18,403

This year-on-year growth not only reflects more people entering the market but also signals confidence in long-term investment in homeownership despite broader economic uncertainties.

New-Build vs Existing Homes

Despite the overall rise in mortgage demand, new-build properties accounted for just 6.5% of purchase applications—only 3,178 loans in May. This represents an 11% drop from May 2024. Several factors contribute to buyers’ declining interest in new-construction homes:

1. Rising Construction Costs: Higher material and labour expenses have pushed asking prices on new developments beyond many budgets.
2. Long Lead Times: Waiting lists and extended build schedules make existing homes more attractive to those seeking to move quickly.
3. Location Preferences: Older homes in established neighbourhoods often come with better infrastructure, schools, and transport links.

However, with the government offering incentives to municipalities for each affordable home built, the balance may shift in favour of new developments in the coming years.

Rising Mortgage Amounts and Property Values

Alongside the volume of applications, the average loan size for buyers increased by 6.1% year-on-year to €376,133. Meanwhile, the average market value of homes backed by these mortgages rose by 6.4% to €510,022. These figures illustrate how price inflation and stronger competition are pushing buyers to borrow more:

Higher borrowing levels raise questions about affordability, especially if interest rates begin climbing again. Buyers must carefully consider long-term costs and explore options like fixed-rate periods and mortgage interest relief schemes.

Implications for Renters and Landlords

As more households transition from renting to owning, the rental market may see shifts in supply and demand:

• Reduced Tenant Pool: First-time buyers exiting the rental market could ease competition for rental units.
• Investor Opportunities: Landlords may face higher borrowing costs but could benefit from converting properties into rental homes if homebuying slows.

Renters should keep an eye on local trends—areas with strong buyer activity may experience stabilised or even declining rents, while regions with fewer transactions could see rental demand remain high.

Government Measures and the Path to Affordable Housing

The Dutch government has recognised the need to bolster housing supply, especially for lower-income households. Through subsidies to municipalities that deliver affordable homes, authorities aim to meet ambitious construction targets and curb price growth. In addition, programmes like huurtoeslag (rental allowance) continue to support eligible tenants, while new schemes are under discussion to assist first-time buyers with down payments.

Although these measures take time to materialise, they signal a commitment to a balanced market where both buyers and renters can find suitable and affordable accommodation.

Looking Ahead: Market Outlook for the Rest of 2025

With mortgage applications at record highs and governmental initiatives underway, the Dutch housing market stands at a pivotal moment. Key factors to watch include:

• Interest Rate Movements: Any further increases will test buyers’ resilience and could dampen application volumes.
• Construction Output: Meeting new-build targets will be crucial to easing supply constraints.
• Economic Conditions: Employment trends and wage growth will influence household budgets and borrowing capacity.

Prospective homeowners and investors alike should stay informed, shop around for the best mortgage deals, and consider both immediate needs and long-term financial health.

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Footnotes

1. Data sourced from the Mortgage Data Network (HDN): https://hdn.nl/nieuws/recordaantal-hypotheekaanvragen-voor-kopen-woning-in-mei/ ↩