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house under water

What are the chances of your home becoming underwater due to falling home prices?

May 02, 2023
2 min reading time

House prices have fallen sharply, NVM data show. In the first quarter of this year, prices were 8.2% lower than in the same period in 2022. This raises the question of how likely it is that your home will be underwater. When the value of your home is less than the mortgage debt, your home is underwater. This means that when you sell, you won't be able to repay your loan in full. During the credit crisis between 2008 and 2013, many homeowners faced this.

Housing market now less vulnerable

Fortunately, the housing market has since become less fragile. In the past, you could borrow more than the value of your home and it was also possible not to repay a penny. This contributed to the fact that about 30% of homes became underwater after the housing market collapsed in 2008.

According to recent data from De Nederlandsche Bank, only half a percent of all houses are currently under water. If house prices fall by 10%, this percentage rises to 2.5%. A 30% drop could theoretically cause problems for one in five homeowners.

Risk varies by person

However, the risk of being underwater varies from person to person. For example, if you paid top dollar in 2021 for a house financed 50 percent with a no-repayment mortgage, you are more at risk than if you bought a house in 2016 with a mortgage that you pay off in 30 years.

Even if you are forced to sell your home, for example in the event of divorce or disability, the proceeds may be less than the actual value. This can be between 80% and 85% of the market value, which can amount to a difference of €45,000 to €60,000 for a house worth €300,000.

It is therefore wise for anyone with a mortgage to identify if and when there is a risk that their home will be underwater. If this is the case, there are measures you can take, such as paying off (more) or modifying the mortgage.


A mortgage is always customized. Our mortgage advisors can give you expert advice on the best type of mortgage and fixed-interest period for your personal situation. Please contact us with all your mortgage questions.

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