Risk & Compliance

Important lessons learned from ‘customised mortgages’ fine

Date:December 27, 2023

The AFM has fined Rabobank for providing irresponsible mortgages. Will customised mortgages no longer be possible from now on? In this article, our colleague Paul Schuiling explains what we can learn from this fine decision and answers this question of whether tailoring is still possible.

What didn’t go right according to the AFM

From the more than 100-page fine decision, a number of important lessons can be drawn for credit underwriting and assessing mortgage applications.
Of 42 so-called customised files examined, eight were found to be in breach of the law, according to the AFM.

A customised mortgage may deviate from the standard lending standard provided a number of conditions are met. The most important is that the mortgage lender explains and substantiates well why the mortgage is still justifiable for the customer (explain). The AFM also assessed the policy (underwriting criteria). According to the regulator, these gave insufficient guidance and did not make it sufficiently concrete when a mortgage could be granted responsibly.

From the penalty decision it can be inferred that the fact that customers are not yet in arrears does not mean to the regulator that the risk of overcrediting was not there at the time the mortgage loan was taken out.

Multiple AFM publications

In a sector letter, the AFM has already published its initial findings following an investigation into credit underwriting policies. Earlier this year, the AFM also announced its intention to conduct a market-wide investigation into the quality of mortgage advice. This shows that the subject is receiving plenty of attention from the regulator.

What does this penalty decision mean for underwriting policies?

We have listed the main points of interest for underwriting policy:

Points of attention substantiation

From the files reviewed, useful points of interest can be identified in the substantiation and assessment of a customised mortgage. In recent years, there has been a lot of focus on customers who could pay a high rent but not the same mortgage burden. This penalty decision echoes a number of aspects from this that it is good to take into account when assessing an individual situation. Below is a brief overview of points to consider when justifying and assessing a customised mortgage.

  • Base the explain on actual savings and not on the savings balance.
  • Take into account income falling due within a 10-year period.
  • Compare not only rent or mortgage charges but also include other (owner) charges.
  • When retaining a home after a relationship break-up, also substantiate the risks of selling the home if charges are not affordable.
  • Declarations that the mortgage is or will remain affordable should be based on a calculation.
  • Verbal promises are so uncertain that they cannot serve as substantiation.
  • An employer’s statement in which the employer declares that it does not intend to terminate the employment early should not be construed as steady income in the case of a temporary contract without a letter of intent.
  • Include the burden of a bridging mortgage in affordability analysis.

Lower expenses based on budgeting

If budgeting or a Nibud form is used to show that the client has lower expenses, it should be clear which situation has been mapped (old or new), different amounts should be verified. The standard loan standard already assumes savings on the sample budget. Lower expenses cannot therefore be translated on a one-to-one basis into a higher borrowing capacity.

Customisation therefore remains possible

The AFM recognises that customisation can be a good solution and a desirable component in the Dutch lending standards methodology. The regulator indicates that it can be a good solution for specific customer situations if done responsibly.


Customisation in mortgages has been in the regulator’s interest for some time. It is also expected to be included in the market-wide survey. It is therefore good if mortgage credit providers check whether they comply with the set requirements.

We recommend taking a number of concrete steps:

  1. Review your underwriting policies. Check whether the frameworks are objective, concrete and require quantitative substantiation and verification in case of customisation.
  2. Adjust the underwriting policy where necessary.
  3. Communicate the changes internally and with your cooperating advisers.
  4. After a few weeks, monitor whether the policy is working by reviewing some files.
    If you need help reviewing your underwriting policy or conducting a scan on whether the underwriting of bespoke mortgages complies with laws and regulations please contact us,.

If you need help reviewing your underwriting policy or conducting a scan on whether the underwriting of bespoke mortgages complies with laws and regulations please contact us.