The Netherlands: Banks to hold more capital for their mortgage portfolios

The Netherlands: Banks to hold more capital for their mortgage portfolios

The DNB has indicated it will introduce a floor for risk weights of domestic mortgage loan portfolios of Dutch banks.

 

According to the regulator, the floor will increase with the loan to value ratio of the underlying mortgage loans.  Due to this proposed measure, the risk weights of mortgage loans will on average increase from 11% to 14-15%.

 

Loans partly or fully covered by the Dutch National Mortgage Guarantee scheme will be exempt from the measure.

 

This new requirement will become effective in the autumn of 2020 for a two-year period, following public consultation and consultation of the European institutions.

 

Photo Credit: Ambra from Pixabay

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