Impact of Family Mortgages on Housing

family mortgage

This article was last updated on December 7, 2023

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The Trend of Borrowing Money from Family for Housing


One in six households with a mortgage has (partly) financed their house by taking out a mortgage with a family member, friend, or acquaintance. De Nederlandsche Bank (DNB) has investigated this. People often do this to borrow more money than they can get through a normal mortgage provider. The practice could further drive up house prices, DNB says.

Popular Method of Financing

In 2020, 645,000 households used private or family mortgages, usually in combination with a mortgage from a bank or insurer, amounting to 70 billion euros. This represents about 10 percent of the total mortgage debt in the Netherlands.

More popular than “jubelton”

In 2020, 1.2 billion euros in family mortgages were added, surpassing the 700 million euros donated in jubilee barrels. The jubelton was an amount that could be donated tax-free for the purchase of a home. However, it has been abolished this year, and gift tax must now be paid for large donations towards purchasing a house.

Impact on Wealth Inequality

People with a family mortgage have, on average, almost 100,000 euros more in total mortgage amount than those with only a regular mortgage. This means they can offer more for a home, potentially contributing to an upward effect on prices, according to DNB.

Concerns and Observations

DNB believes that banks and insurers should better assess whether someone also has a family mortgage to prevent a price-raising effect and ensure fair lending practices.

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