The Code of Conduct on Mortgage Credit is a code of conduct which is endorsed by virtually all mortgage lenders in the Netherlands. The code, which relates to residential property only and not to commercial property, includes provisions on the following subjects:

  • the information that must be supplied to consumers;
  • the calculation of the mortgage costs;
  • the assessment of the mortgagor's borrowing capacity;
  • the calculation of the effective interest rate; and
  • early repayment of the mortgage loan.

On 1 August 2011, the amended code of conduct will enter into effect. The main changes are as follows:

  • The maximum mortgage credit will in principle be fixed at 104% of the property's market value, plus the transfer tax;
  • The conditions under which it is possible to deviate from the requirements for assessing creditworthiness will be tightened;
  • The redemption-free portion of the mortgage loan will be limited to 50% of the property's market value.

According to the AFM, the amended code of conduct provides a useful clarification of the open-ended norms for responsible lending.