Fixed vs. Variable Interest, and How Long to Fix

Choosing your rentevaste periode is one of the biggest decisions in a Dutch mortgage. Why almost everyone fixes rather than floats, what a 10- or 20-year fix really buys you, how your loan-to-value quietly sets your rate, and what happens when the fixed period ends.

When you take out a Dutch mortgage you choose two things about the interest: whether it is fixed or variable, and if fixed, for how many years (the rentevaste periode). This one choice shapes your monthly payment, your certainty, and how exposed you are to the next decade of interest-rate moves. It deserves more thought than the headline rate.

Variable rate: cheaper on paper, riskier in life

A variable rate (variabele rente) moves with the market, usually reviewed monthly. When rates are low it can start below the fixed options, and it lets you overpay or refinance freely without an early-repayment penalty.

The catch is that your payment can rise at any time, with little warning. For most buyers — especially a first home bought at the edge of what they can afford — that uncertainty is the wrong risk to take. A payment that climbs €200 in a year is manageable for some households and destabilising for others. This is why the large majority of Dutch mortgages are fixed, not variable.

Fixed rate: paying for certainty

With a fixed rate you lock the interest for a chosen period — commonly 5, 10, 20 or even 30 years. During that time your rate does not change, so on an annuity or linear mortgage you know your payments in advance.

The rule of thumb is simple: the longer you fix, the higher the rate, but the more certainty you buy. A 30-year fix costs more per month than a 10-year fix, and in exchange you never think about interest rates again for the life of the loan. A shorter fix is cheaper now and re-prices sooner — a bet, in effect, that rates will be kind when your period ends.

How to think about the length

There is no universally correct number, but a few honest questions narrow it down:

In practice, 10 and 20 years are the popular middle ground for Dutch buyers: long enough to sleep well, short enough not to overpay wildly for certainty you may not need. Many first-time buyers fix for 10 or 20 years for exactly this balance.

The hidden lever: your loan-to-value

Two people can be offered different rates for the same fixed period, and the reason is usually loan-to-value — how much you borrow relative to the home's value. Lenders sort mortgages into risk brackets, and a smaller loan against the same house sits in a safer bracket with a lower rate.

That is why bringing more of your own money, or a home appreciating in value, can drop you into a cheaper band. It is also why the National Mortgage Guarantee (NHG) matters: because it insures the lender against loss, an NHG loan typically carries a lower rate than the same loan without it. A better energy label can shave a little more off.

What happens when the fixed period ends

A fixed period ending is not the end of the mortgage. A few months before, your lender sends a renewal offer (renteverlengingsvoorstel) with new rates for a fresh set of fixed periods, based on the market at that moment and your now-lower loan-to-value.

You are free to accept it, choose a different period, or move your mortgage to another lender (oversluiten) if a better deal exists — weighing any switching costs against the saving. The key point is that you re-decide the fixed-vs-length question every time a period ends, with a smaller loan and, often, a stronger position than when you started.

A word on breaking a fixed rate early

If you repay or refinance a fixed loan before its period ends and rates have fallen since, the lender may charge an early-repayment penalty (boeterente) to compensate for the interest it loses. Normal penalty-free overpayments — usually up to around 10% of the original loan per year — are exempt. It is not a reason to avoid fixing, but it is a reason not to fix for far longer than you expect to keep the loan.

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