Dutch banks will be milder about ‘new style’ student debts when assessing mortgage applications in the future, the Dutch banking association has reportedly agreed with the education ministry.

The government is scrapping student grants from the next academic year, meaning students will build up larger debts by the end of their degree courses. This had prompted fears it would be more difficult for graduates to buy a house.

The leniency will only affect new student debts which have a longer pay-back period.

In the new deal, banks will assume students with a debt of €10,000 will pay back €45 a month. In the current rules, a €10,000 debt is assumed to mean a €75 monthly repayment.

Students currently leave university and college with an average debt of €15,000 but student unions say this may double when grants – nearly €280 a month for an away student – are scrapped.