Mortgage Interest Deduction
Mortgage interest deduction means you can deduct the interest you pay on your mortgage from your taxable income in box 1. This is one of the largest deductions in the Netherlands and can save you hundreds to thousands of euros per year. The deduction applies for a maximum of 30 years and only for your primary residence. Since 2014, your mortgage must be annuity-based or linear to qualify for the deduction. The maximum deduction rate in 2025 is 37.48% – the rate of the second bracket in box 1. Previously you could deduct at the top rate (49.50%), but this has been gradually reduced.
Example
You pay €8,000 per year in mortgage interest. You can deduct this from your box 1 income. At the maximum deduction rate of 37.48%, this yields a tax benefit of €2,998 per year, or nearly €250 per month.
Why does this matter?
Do you own a home with a mortgage? Then this is likely your biggest deduction. Don't forget to request a provisional assessment so you receive the benefit monthly rather than waiting until after filing.
Want to know how this applies to you?
This term is relevant for our Your resident tax sorted. service.