You can calculate your home equity very simply: the value of your home minus the outstanding mortgage debt. With a home worth €470,000 and an outstanding debt of €250,000, you have €220,000 in equity. But note: released equity is a new loan that you repay, not free money. The interest is only tax-deductible if you invest the money in your own home. Below we estimate what it roughly costs to release €30,000 or €100,000.
What exactly is home equity?
Home equity is the part of your home's value that is no longer encumbered by a mortgage. Your home has likely increased in value over the years, and you have also repaid part of your mortgage. The difference between the two is your equity.
Important to know beforehand: as long as you continue living in your home, that equity is "paper" value. You only see it as real money when you sell, or when you release part of it through an additional loan. And it's precisely the latter that many people mean when they talk about "releasing home equity."
How do you calculate your home equity?
The formula is:
Home value minus outstanding mortgage debt = home equity
An example using national figures. The median asking price for a home is around €470,000 (the median is the middle price and gives a fairer picture than the average, which is inflated by expensive outliers to about €539,000).
- Home value: €470,000
- Outstanding mortgage debt: €250,000
- Home equity: €220,000
Want to do it for your own situation? Use the most recent WOZ value or a current valuation as the home value, and the current balance of your mortgage as the outstanding debt. In cities where prices are higher, such as Utrecht (median around €510,000) or Amsterdam (around €595,000), the calculated equity with the same outstanding debt will be higher. In Groningen (around €325,000) it will be lower.
How do you release home equity?
There are roughly three ways to access your home equity without moving:
- Increase your mortgage: you borrow extra from the same lender, often the simplest route.
- Second mortgage: a separate loan alongside your existing mortgage, sometimes from a different bank.
- Equity release mortgage: mainly for seniors, where you release the equity bit by bit without monthly repayments. The debt then increases and is settled later (upon sale or death).
For all three, the bank checks whether you can afford the extra loan based on your income, and the home remains the collateral.
What does it cost to release €30,000 in home equity?
We roughly calculate with a mortgage interest rate of around 4%, the average for a 10-year fixed rate with NHG in June 2026. These are indications, not quotes: your actual monthly cost depends on the interest type, term, and your personal situation.
- Interest-only (you only pay interest): 4% of €30,000 is €1,200 per year, so about €100 per month in interest. You repay nothing, so the €30,000 debt remains.
- Annuity (interest plus repayment, over 30 years): roughly €140 to €145 per month. At the end of the term, the loan is fully repaid.
Interest-only seems cheaper per month, but you keep the debt. With an annuity, you pay more per month and reduce the loan.
What does it cost to release €100,000 in home equity?
The same approach, with the same assumption of an interest rate around 4%:
- Interest-only: 4% of €100,000 is €4,000 per year, so about €330 per month in interest. The €100,000 debt remains.
- Annuity (30 years): roughly €475 to €480 per month, gradually repaying the entire loan.
Again, these are rough calculations to give you an idea. A mortgage advisor can make an exact calculation for your situation, including the impact on your existing mortgage.
Is the interest on released home equity tax-deductible?
This is the most important tax point, and it is often misunderstood. The interest on your released home equity is only deductible if you invest the money in your own home, for example for a renovation or sustainability improvements.
If you use the money for a car, a world trip, or other consumption, the interest is not deductible. You then simply have a consumer loan secured by your home. So always keep your invoices for renovations, because the tax authorities may ask for them.
Effect on benefits, assets, and box 3
Releasing home equity can have unintended side effects. A few things to watch out for:
- In the bank = box 3: if you put the released amount in your savings account, it counts as assets in box 3. You may have to pay tax on it.
- Benefits: extra assets in the bank can reduce or eliminate your entitlement to rent allowance or healthcare allowance, because there are asset limits for these.
- Higher monthly costs: you are borrowing extra, so you pay more per month. This must fit your income, even if the interest rate rises in a few years.
If you release the money and immediately use it for renovations, it does not sit as savings in your account and the box 3 effect usually does not apply. If you leave the amount in your account for months, it does.
Is releasing home equity wise?
That depends entirely on your plan. For a renovation that makes your home more valuable and comfortable, or for sustainability improvements with deductible interest, it can be a logical step. For consumption without deduction, it is an expensive way of borrowing where you use your home as collateral.
Always calculate what the higher monthly cost means for you, and remember that you can only release your home equity once. If in doubt, present your situation to an independent mortgage advisor. This article is intended as an explanation and is not financial or tax advice.
Curious about what homes in your city are worth as a benchmark for your equity? Check the current listings in, for example, Rotterdam (median around €410,000) or Zwolle (around €450,000) on Buurtje.nl.
Source: own current home listings on Buurtje.nl, median asking prices. Asking prices are not transaction prices. Monthly costs are rough indications at an interest rate of around 4% and vary per situation.
