No forced sales when the mortgage is overdue

The Ministry for the Environment and Housing, the Dutch Banking Association, the Dutch Association of Insurers, the National Mortgage Guarantee and the Eigen Huis Association have made agreements to ensure that homeowners with payment arrears do not end up on the street during the corona crisis.

Lenders will not be forced to sell homes until at least July 1 if homeowners are unable to pay their mortgage payments. This period can, if the duration of the crisis gives cause to do so, be extended in consultation and where necessary.

On March 26, we called on banks and other lenders not to confront homeowners who are in debt by  late payments, with forced sales and foreclosure auctions during the corona crisis. We are therefore happy with this agreement. In particular, it means less acute worries for people who have been dealing with mortgage arrears and have financial worries for some time.

Payment problems are coming up

The cabinet has taken measures to support people who are facing financial difficulties in the short term due to the crisis. However, some homeowners will no longer be able to afford the mortgage costs of their home.

Our survey showed that 14% of self-employed workers owning a home already have concerns about the affordability of mortgage payments in the short term. Three-quarters of them are afraid that the income will disappear partially or completely and more than fifty percent of the homeowners fear that their own financial reserves will run out quickly. Due to the consequences of the corona virus, less than half of the self-employed do not expect to be able to maintain their income at the old level.

Discuss payment problems with the bank in time

On October 1, 2019, 70,000 homeowners had payment arrears of at least three months on their mortgage. Half of them expected to catch up within a year, a third thought it would take two years to do so.

Now, for many people, a large part of their income is lost due to the corona crisis. As a result, some of them will not be able to catch up on payment and for some it will increase further. In all cases, the association advises to contact the lender in time. Only then can a solution be sought together and new agreements can be made.

Source: Vereniging Eigen Huis, April 2020

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