The Hypotheekrenteaftrek System
The Netherlands offers one of Europe's most generous mortgage interest deductions (hypotheekrenteaftrek), allowing homeowners to deduct mortgage interest from taxable income for up to 30 years.
2026 Tax Deduction Rate
Mortgage interest is deductible at the highest marginal tax rate in Box 1:
For high earners, this means nearly half of mortgage interest is effectively refunded through tax savings.
Qualification Requirements
Eligible mortgages must be:
The Eigenwoningforfait (Deemed Rental Value)
While you deduct interest, you must also pay tax on a deemed rental value (eigenwoningforfait) of 0.35% of your home's WOZ value. This partially offsets the interest deduction benefit.
Example Calculation
Scenario: €400,000 mortgage at 3.5% interest, €500,000 home value, 49.5% tax bracket
Strategic Considerations
Accelerate interest payments: In the 49.5% bracket, paying extra mortgage interest in high-income years maximizes deductions.
30-year horizon: The deduction is limited to 30 years from first mortgage, so refinancing doesn't reset the clock.
Partner income splitting: For couples, put the mortgage in the name of the highest earner to maximize the deduction rate.