The Dutch financial services regulator AFM has fined Rabobank €12 million for “not being careful enough” in extending tailor-made mortgages which deviate from the standard rules.

The bank, the AFM said, gave a number of clients mortgages that were far too high and who then faced unnecessary financial risks. The mortgages were extended between 2019 and 2021.

For the past 15 years, mortgages in the Netherlands have been subject to strict rules about income and the value of the property, and the maximum loan has gradually been reduced to 100%.

Banks can, however, deviate from the rules if they make proper assessments about whether or not it is responsible to do so. But the bank failed to make the necessary checks and did not exercise proper care, the AFM said.

The agency bases its claim on an assessment of 42 mortgages, of which eight were found to be irresponsibly high. Tailor-made mortgages are designed for people with an irregular income, such as the self-employed.

It is unclear if any of the people with the disputed mortgages actually ran into financial difficulty paying them.

Rabobank told the Financieele Dagblad it disagrees with the AFM’s findings and is considering an appeal.