Region

Jurisdiction

Regulator

2026-04-09

Interest-only mortgages require attention – engage in dialogue

The Dutch Financial Markets Authority (AFM) addresses the European Central Bank’s directive to reduce interest-only mortgage portfolios by arguing that these products remain essential for affordable housing and financial flexibility given the Netherlands’ strong pension wealth. AFM board member Jos Heuvelman calls on banks to proactively and carefully engage borrowers before loan terms expire, emphasizing that maintaining affordable monthly payments should allow customers to remain in their homes without mandatory early repayment. Consumers are advised to actively participate in these discussions, ideally with advisor support, to jointly minimize risks while ensuring sustainable housing affordability.

Netherlands

Autoriteit Financiele Markten

Article

09/04/26

Banks recently announced that they must reduce their portfolio of interest-only mortgages, as ordered by the European Central Bank. However, interest-only mortgages can actually contribute to affordable housing and financial flexibility, writes AFM board member Jos Heuvelman in an opinion piece in De Telegraaf. "As long as the monthly payments are affordable, someone should simply be able to stay in their home."

Many Dutch people still have a (partially) interest-only mortgage. Heuvelman: "These are ordinary people who want certainty that they can continue living in their homes. In a world where so much is changing at once, that is not a luxury, but a basic need. Compared to other European countries, the Netherlands has substantial pension wealth: for many households, income after retirement remains reasonably stable. This means that most people can continue to afford their mortgage payments after retirement, and that fully repaying the mortgage before retirement is far from always necessary."

According to Heuvelman, good cooperation between banks and mortgage advisors increases the likelihood that customers will take timely action when needed: "Yet many people are startled when the bank contacts them, whereas this is usually an invitation to jointly assess whether the mortgage still fits their personal situation. This is part of the bank's duty of care: not waiting until something goes wrong, but initiating a conversation in good time. This is especially important towards the end of the term, as retirement approaches or housing needs change."

He urges banks to engage in dialogue with their customers and to conduct these conversations carefully. "Explain why you are reaching out, provide a clear course of action, and respect boundaries. And consumers, engage in that conversation, for example through an advisor. Together, this ensures that all those consumers with an interest-only mortgage can continue to live as worry-free and affordably as possible. With as few risks as possible for the customer and the bank."