What Does NHG Mean?
The National Mortgage Guarantee (NHG) provides a safeguard for both lenders and homeowners by ensuring that mortgage debts are repaid if the borrower is no longer able to meet their financial obligations due to significant life changes. This could include divorce, unemployment, disability, or the death of a partner. With NHG, lenders have the security that the mortgage debt will be repaid, even if the homeowner can’t cover the payments. Homeowners, in turn, gain protection from residual debt after a forced sale of their home.
How NHG Works
If a homeowner’s financial situation worsens due to a covered event, the NHG can help adjust the mortgage to keep it affordable, allowing the homeowner to remain in their home. If selling the property is necessary and the proceeds from the sale don’t cover the full mortgage, NHG can step in to pay the remaining debt. This offers significant financial relief in situations where selling a home at a loss would otherwise result in a lingering financial burden.
NHG also often provides access to a lower mortgage interest rate, which can significantly reduce monthly payments. The fee paid for NHG is tax deductible, which can help offset the initial cost.
NHG Costs in 2025
As of 2025, the cost for obtaining NHG is set at 0.4% of the total mortgage amount. With the maximum mortgage limit raised to €450,000, the maximum NHG fee will be €1,800. For homeowners who also co-finance energy-saving measures, the maximum mortgage limit is €477,000, and the NHG fee increases accordingly.
While NHG offers financial security, it is important to note that NHG applies only to loans within the established mortgage limit. Borrowers interested in properties exceeding the NHG threshold will need to provide more of their own capital. In cases where NHG is used to forgive residual debt after a forced home sale, it can impact a person’s credit rating, making it more challenging to secure future loans for up to five years.
Eligibility and Conditions for NHG in 2025
NHG is designed to help homeowners retain their homes where possible. If foreclosure is unavoidable, NHG can cover the residual debt, provided certain conditions are met. Borrowers can apply for NHG when purchasing a home or when renovating an existing home for improvements.
Eligibility for NHG is assessed by the Home Ownership Guarantee Fund Foundation, and the application process is managed through lenders or mortgage intermediaries. Homeowners can also refinance their existing mortgage under NHG terms, if eligible.
Key conditions for NHG in 2025 include:
- The maximum mortgage amount is €450,000, which covers 100% of the property’s market value.
- If energy-saving investments are included, the maximum mortgage amount is €477,000 (including an additional 6% specifically for energy-saving measures).
- NHG is available even if the purchase price exceeds €450,000, provided the appraised value of the home is €450,000 or lower, but additional funds will need to be contributed by the buyer.
- Property appraisals must be conducted by a certified validation institute, and for new builds, a quality guarantee certificate is required.
Additional Costs to Consider
In addition to the NHG fee, homebuyers or those refinancing with NHG should consider various other costs, such as:
- Early repayment penalties on existing mortgages
- Costs for renovations or energy-saving measures
- Notary fees
- Property appraisal fees
- Mortgage advisory fees
Tax Deductions and NHG
The one-time NHG fee paid when taking out a mortgage is tax deductible. This provides an additional financial benefit, especially when combined with the lower interest rates often available for NHG-backed loans. This tax deduction can help homeowners recoup some of the upfront cost relatively quickly.
Life Insurance and NHG
Since January 2020, life insurance is no longer mandatory for NHG-backed mortgages. This applies to both new and existing NHG mortgages. However, some mortgage advisors may recommend life insurance to ease the financial burden on surviving relatives. Certain lenders may still require life insurance as part of the NHG mortgage package, depending on their terms.
Refinancing With NHG
Homeowners can convert an existing mortgage into an NHG-backed mortgage to benefit from the security and potentially lower interest rates. The maximum mortgage amount for refinancing under NHG is €450,000, including any additional costs. If energy-saving investments are involved, the maximum mortgage amount increases to €477,000.
A key condition for refinancing with NHG is that up to 50% of the original market value can be non-repayable, provided the mortgage was taken out before January 1, 2013. Some of the refinanced amount must also be used for home improvements or energy-saving measures, and a cost specification may be required by the lender.