What is a bank guarantee?

When buying a home, you’re usually required to provide financial security to the seller, a kind of advance payment.
This means you must pay 10% of the purchase price to the notary in the form of a deposit, or alternatively, you can arrange a bank guarantee. 

Most people don’t have that 10% readily available in their savings account. Fortunately, that’s not a problem, because instead of transferring the full deposit amount yourself, you’re allowed to arrange a bank guarantee instead. 

Two options: deposit or bank guarantee 

1. Transfer 10% to the notary yourself
   If you have enough savings, you can choose to transfer the 10% directly to the notary. This amount is then settled with the total purchase price on the completion date. This is the most cost-effective option, as you don’t pay any fees for a bank guarantee. However, it does mean temporarily tying up your savings. 
2. Arrange a bank guarantee via your mortgage advisor
   If you don’t have the amount readily available — or prefer to use your savings for something else (like a new kitchen or renovation) — you can opt for a bank guarantee. In this case, a specialized provider (such as Nationale Waarborg or BNP Paribas) guarantees the 10% to the seller in case the deal unexpectedly falls through. 

The cost of a bank guarantee is usually between €300 and €400 (a one-time fee). 

How does a bank guarantee work and what needs to be done? 

Setting up a bank guarantee is easy. Your mortgage advisor handles the request, and all you need to do is provide a digital signature. This way, you don’t have to transfer the money yourself, but you still fulfill the legal requirement toward the seller. 

A bank guarantee can only be issued if the guarantee provider is confident that you’re financially able to complete the purchase. This can be shown in one of two ways: 

1. You’ve proven that you have enough funds to buy the property outright (which is very rare), or
2. Your mortgage has been approved. 

Once that’s confirmed, all that’s left for you to do is sign digitally. 

The requirement for a deposit or bank guarantee is included in the purchase agreement that you sign when buying a property. In most cases, the bank guarantee or deposit must be arranged within one week after the resolutive conditions expire. 

Example 

Let’s say you’re buying a home for €500,000. That means you need to provide a €50,000 security. You can do this in two ways: 

• Option 1: Transfer €50,000 yourself to the notary as a deposit.
• Option 2: Arrange a bank guarantee via your mortgage advisor. You’ll pay a one-time fee of approximately €300–€400, and you don’t need to transfer the €50,000 yourself. 

What’s the best option for you? 

• If you have enough savings and want to keep costs low, it’s usually cheaper to transfer the deposit yourself. 
• If you don’t have enough savings, or prefer to use your funds for other expenses, a bank guarantee is a smart and convenient solution. 

No matter what you choose, your mortgage advisor will help you arrange the best option for your situation. That way, you don’t need to worry and can focus entirely on the excitement of buying your new home.