Home owners should be able to borrow no more than 90% of the value of their house, central bank president Klaas Knot told television show Nieuwsuur on Thursday evening.

At the moment people can borrow 106% of the value of their homes but a gradual reduction to 90% would ‘bring stability’ to the housing market, Knot said.
In November, the central bank called on the government to limit the tax breaks for mortgage holders, saying the current system is damaging the country’s financial stability.
The Dutch system is one of the most generous in Europe – home owners can fully deduct all the interest from tax for 30 years – and the current government has pledged to leave it untouched.
‘The large mortgage debt in the Netherlands (128% of GDP) reflects the current fiscal regime, which encourages households to take out maximum loans and make minimum repayments,’ the bank said at the time.