Mortgage interest deduction 2026: how does it work and how much tax do you save?

How does the mortgage interest deduction work?

If you have an own home with a mortgage, you may deduct the mortgage interest you paid from your taxable income. This lowers your taxable income and therefore your income tax due. The Belastingdienst (Dutch tax authority) considers your home as an asset that generates income — the so-called imputed rental value (eigenwoningforfait). You must add this fictitious income to your taxable income.

Your net benefit is the difference between the mortgage interest that you may deduct and the imputed rental value that you must add to your income.

What is the imputed rental value (eigenwoningforfait)?

The imputed rental value is a fictitious income that you must declare because you own a home. The idea is that owning a home provides a benefit because you do not have to pay rent.

In 2026 the imputed rental value is 0.35% of the WOZ value of your home. This applies to WOZ values up to around €1,310,000. For higher WOZ values a higher percentage applies.

Which mortgages qualify?

Not every mortgage entitles you to interest deduction. The conditions are:

• The loan must be for your own home (main residence)
• The mortgage was taken out after 1 January 2013: in that case it must be an annuity or linear mortgage (i.e. with repayments)
• Mortgages from before 2013 (existing mortgages) keep their entitlement to interest deduction, even if they do not amortise (e.g. savings mortgage, interest-only mortgage)

Example calculation: how much tax do you save?

Suppose: you bought a home in Zaandam with a WOZ value of €340,000. Your annuity mortgage stands at €280,000 at 4.2% interest. You earn €52,000 gross per year (box 1 tax rate: 36.97%).

* Indicative example calculation. Your actual refund depends on the exact interest paid, WOZ value, tax bracket and personal situation. We calculate the exact amount for you.

Phasing out of the mortgage interest deduction

The government has been phasing out the mortgage interest deduction for years. The maximum rate at which you can claim the deduction is limited to the lowest tax rate in box 1: in 2026 that is 36.97%. This means that higher incomes (which normally pay 49.50% tax) can only offset the deduction at 36.97%.

This phase-out process has by now been fully implemented for most taxpayers. In the future the deduction will be further limited, but at present 36.97% is the applicable maximum.

Apply for preliminary tax refund

You do not have to wait for your annual tax return to receive the tax benefit. Via the preliminary tax refund the Belastingdienst (Dutch tax authority) pays out your expected refund in advance on a monthly basis. That can make a significant difference to your monthly costs.

You apply for the preliminary tax refund via mijn.belastingdienst.nl. You enter:

• Your expected mortgage interest for the current year
• The WOZ value of your home
• Your estimated income

Is your estimate incorrect? Adjust the preliminary tax refund in the meantime to prevent having to pay back afterwards.

Which other costs are deductible?

In addition to the mortgage interest, there are other costs around your own home that you can deduct:

• Mortgage closing costs — such as advisory and brokerage fees (deductible once)
• Notary fees for the mortgage deed (not for the purchase deed)
• Valuation costs for the mortgage application
• NHG costs (guarantee premium) — the premium for the National Mortgage Guarantee
• Construction interest — interest paid before the key date for new builds

Note: renovation costs, maintenance and furnishing costs are not deductible.

Have your mortgage interest deduction checked

Many first-time buyers miss the mortgage interest deduction or fill in the wrong amount. We check your entire tax return and ensure you receive the maximum refund — including the preliminary tax refund for next year.