As a freelancer, there are quite a few challenges to navigate before receiving a mortgage. However there is one decision that often feels more difficult than the rest; choosing between a fixed or a variable mortgage rate. When your income fluctuates during the year and lenders asses your financial position with extra criteria, the type of interest rate that you choose can make a huge difference in how comfortable you are with the monthly payments. With all these difficulties there is also good news, that both options can work well as long as you understand how they affect your income patterns and plans for the long term. This understanding becomes even more important when you want your mortgage choice to support long term financial stability.

Lenders in the Netherlands typically asses freelancers based on their average income over the last 3 years. For this it is important to get an ‘income statement’, which is a extensive document provided by a qualified expert analyzing the results and financial position of the person over the last 3 years, before giving an accurate income statement that is accepted by the lender. However when choosing between variable or fixed mortgage rates, it is essential to get a good insight in how your income rises and falls depending on projects or seasons. By looking at your past earnings, business expenses and buffer you can choose a mortgage rate that fits both your best and your worst months. This analysis is what helps you understand how much fluctuation your budget can actually handle, which is especially important for freelancers.

Advantages of both rates

When looking at the different rates, we see benefits to both of them. A fixed mortgage rate appeals to many, because of the certainty that it offers. Your monthly payment stays the same regardless of how the market rate changes. It stays the same for the entire fixed term, which is nice to have when your income fluctuates. This stability can certainly help with long term planning, because you can say for certain what your monthly mortgage costs are going to be in a few years. For freelancers who are looking for stability, or still building their business, a fixed rate often reduces stress and helps with the consistent budgeting of monthly expenses. It also aligns well with clients who prioritise sustainable financial planning and prefer a stable foundation to build on.

On the other hand, a variable rate moves with the market, either every quarter, every half year, or yearly. This means that your monthly payment may rise or drop, depending on the developments in the interest rates. This option can be attractive if you have a strong financial buffer and feel comfortable with changes. Some freelancers may choose a variable rate because they expect interest rates to decrease before they switch to a fixed rate when the interest rate is at a point they are comfortable with. Some freelancers also choose a variable rate because they have a steady income, and are ready for changes at all times, hoping to get an advantage because of lowering interest rates at a later time. In these situations, the flexibility of a variable rate can be an advantage, especially when you are prepared for short term fluctuations.

Which choice to make

The best choice all depends on how you run your business, how predictable your income is and how comfortable you are with financial instability. Freelancers with highly volatile earnings often benefit from the stability of a fixed rate, while those with substantial savings may feel okay with choosing a variable rate, predicting that the market rate will drop. Your personal attitude toward financial risk also plays a more significant role than many freelancers realise.

In my years of working with freelancers, I see that the most successful choices come only from preparing well. Freelancers who clearly understand their cash flow, limits and financial buffer approach this decision with far more confidence. Lenders also appreciate this preparation, which can lead to them approving your application more smoothly.

Conclusion

Before making a final decision it is important to consider your goals for the next couple of years. Do you have any radical plans, in either your business or your personal life? Are you planning to expand, do you expect fluctuations, are you planning to have children? A fixed rate offers peace of mind when you want predictability. A variable rate offers flexibility and the possibility of beating the market rate, gaining an edge. By taking calculated risks and having enough reserves, you can handle temporary rises. For my clients at my sustainable financial advisory practice, this is not only a choice about interest rates but about creating long term resilience. The right mortgage structure helps freelancers build stability, reduce stress and create room for growth. With the right approach every freelancer can secure a mortgage that provides confidence and a solid ground to build on for the years that are ahead.