Borrow from your parents or the bank?

Buying or renovating a home with help from your parents can meaningfully lower your monthly costs. But a family loan and a gift are two different things, and it pays to look at them separately. I'm Cash, and I'll help you compare honestly: borrow from your parents or the bank?

This tool and explainer use Dutch tax rules (checked 12 September 2026). The concepts travel, but the exemptions and deduction rates are specific to the Netherlands.

Start with what you can both carry

First discuss how much your parents can spare and which monthly payment you can carry. Think ahead too: what if an income falls away, your parents need their money sooner, or a gift stops? So also run the numbers without yearly help — a loan is still a repayment obligation.

Agree together on the amount, the interest rate, the fixed-rate period, repayment, payment dates, early repayment and what happens if payments become difficult. Also discuss selling the home, a break-up and death, and record how you handle any other children in the family.

💶 Cash: "A family loan feels informal, but treat it like a real loan. Clear agreements on paper prevent misunderstandings — especially between people who love each other."

When can the interest be deductible?

For a new loan for your own home (buying, maintenance or renovation), interest deduction may be possible. You must, among other things, repay via annuity or linear within 30 years, agree a market-conform rate, actually pay the interest and report the loan details in your tax return. A loan for a car or holiday gives no home-interest deduction, and waived interest is not deductible. Belastingdienst: family loan for your own home (NL).

The calculator uses an assumed tax benefit. Your real outcome depends on your tax return. In 2026 the top-bracket deduction is capped at 37.56% — which does not mean everyone gets exactly that back. Belastingdienst: deduction cap (NL).

Which rate do you agree?

Look at comparable financing and its conditions. A rate of 6% is not automatically acceptable just because you borrow within the family, and the tax office does not allow a standard 25% mark-up on the market rate. Keep the reasoning behind your chosen rate. The 4%, 5% and 6% buttons in the calculator are for comparison — they don't prove a rate fits your loan. Belastingdienst: rate examples (NL).

How does gifting work alongside the loan?

In 2026 parents can gift their child €6,908 a year combined within the ordinary annual exemption. Account for other gifts in the same calendar year. The special increased exemption for a home no longer exists (since 2024). Belastingdienst: exemptions 2026 (NL).

Record a gift separately and keep payments traceable. Don't let interest simply lapse under the label 'gift'. And remember: a gift can go alongside a normal bank mortgage too. So compare both loans with the same parental help — otherwise the gift's benefit wrongly looks like a benefit of the family loan.

💶 Cash: "€3,000 a year averages €250 a month. But with a single yearly transfer, that money isn't in your account every month. Budget with what actually arrives."

Repayment and cost are two different things

A monthly payment is made of interest and principal. Interest is a financing cost; principal shrinks your debt. That's why the calculator shows both separately. Note: a lower monthly payment can go together with less principal — and therefore a higher remaining debt.

What does it mean for your parents?

Your parents receive interest and get their capital back gradually. At the same time their money is tied up and they carry the risk that you can't pay. A gift lowers their wealth. So don't only ask what you save, but also how much room they keep.

A claim on an adult child usually falls in box 3. The tax treatment can differ from money in a savings account, so interest received is not the same as net return. Belastingdienst: lent money in box 3 (NL).

Work it out yourself

💶 Open the family-loan calculator — compare four scenarios side by side: bank or parents, with or without a gift. You'll see your gross monthly payment, interest and principal separately, a possible tax benefit, and what it means for your parents.

Enter your own numbers first, then view the same loan without the gift, and try a higher rate after the fixed period. Use the result to start your conversation — with each other, and with a mortgage adviser or tax specialist.

This explainer and the calculator give an indication based on your input and the shown assumptions (Dutch rules, checked 12 September 2026). They do not determine whether you get a loan, whether the rate is market-conform, or how much tax you actually get back. Future rates, gifts and tax rules can change. Not tax or financial advice.