Foundation damage from drought: a manageable risk, but highly relevant for mortgage investors

This article analyses the financial impact of pile rot caused by drought in properties with timber foundations. While individual homeowners may face significant costs, our quantitative analysis shows that, at portfolio level, the risk for investors remains limited to just 0.4 basis points over the mortgage lifetime. This is thanks to strong mitigation measures, such as the National Mortgage Guarantee and substantial loan-to-value buffers.

Achmea Mortgages is also expanding its green loan to include climate-adaptive measures, enabling homeowners to better protect their properties against drought-related foundation damage.