Dutch Mortgage Interest Deduction 2025: How Much Can You Save?

How Does the Mortgage Interest Deduction Work?

The mortgage interest deduction (hypotheekrenteaftrek) is one of the largest tax benefits for homeowners in the Netherlands. You may deduct interest paid on the mortgage of your primary residence (eigen woning) in box 1 of your income tax return. In 2025 the maximum deduction rate is 37.48%. For every EUR 10,000 in interest paid, you receive up to EUR 3,697 back. Higher earners (above EUR 76,817) pay tax at 49.50% but can only deduct at 37.48%, creating a gap.

Which Mortgages Qualify?

Since 1 January 2013 a repayment requirement applies: only interest on annuity or linear mortgages is deductible. Interest-only (aflossingsvrij) mortgages taken before 2013 retain their deduction right under transitional rules. The deduction applies for a maximum of 15 years per property. When you move, the remaining term carries over.

Deemed Rental Value (Eigenwoningforfait)

The deduction is offset by the eigenwoningforfait, an imputed income addition based on the WOZ value of your property. In 2025 this is 0.35% for properties valued up to EUR 1,330,000. For a home with a WOZ value of EUR 400,000, the addition is EUR 1,400.

Hillen Act Phase-Out

Homeowners who fully repaid their mortgage used to pay no eigenwoningforfait thanks to the Hillen Act. This exemption is being phased out over 15 years. In 2025 the exemption still covers 76.667%. By 2041 it will be eliminated entirely.

Worked Example

Assume an annuity mortgage of EUR 350,000 at 3.8% interest. Annual interest is approximately EUR 13,300. At the 37.48% rate the tax benefit is roughly EUR 4,917. The eigenwoningforfait (WOZ EUR 420,000 x 0.35%) adds EUR 1,470 to your income. Net annual saving: approximately EUR 3,447.

Optimisation Tips

• Allocate wisely: fiscal partners can choose who claims the deduction. Assign it to the higher earner.
• Consider extra repayments: with low savings rates, paying down your mortgage may yield a better effective return.
• Check your WOZ value: an inflated WOZ increases your eigenwoningforfait. You can object within 6 weeks of receiving the WOZ notice.

Get Professional Advice

The mortgage interest deduction affects both your tax return and your financial planning. Mojka Finance helps you maximise your benefit while filing correctly. Contact us for personalised advice.