National mortgage guarantee scheme drops its maximum loan rate

House buyers will be able to borrow less money through the national mortgage guarantee scheme next year, the scheme’s organisers NHG told the Algemeen Dagblad on Monday.

From January 1, the maximum amount that can be borrowed, dependent on income, will drop by €4,000 to €25,000. The move is being taken because people have less disposal income in the current financial crisis, the NHG said.
The national mortgage guarantee scheme pays off the debt if people default on their payments. Since the beginning of this year, banks are giving priority on new mortgages to homes with the guarantee.
Home ownership
It was introduced in 1995 as a way of encouraging home ownership and currently covers homes costing up to €350,000. According to the NHG, 90% of homes up to this price are covered by the guarantee.
NHG director Karel Schiffer told the AD the reduction in the amount borrowed will not adversely affect new buyers. ‘The new maximum of €25,000 means the same house can be bought in 2013 as in 2012,’ he said.
However, housing market expert Matthijs Mons of IG&H Consulting says the lower maximum will depress house prices even further.

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