The power to terminate is broad, but not unlimited
Banks routinely stipulate the right to terminate a credit agreement. That power exists — but its exercise is not beyond judicial control. Whenever a bank makes use of that power, the court examines whether doing so, in the specific circumstances, is acceptable according to standards of reasonableness and fairness. For private individuals with a mortgage loan the threshold is particularly high: loss of the home is, in most cases, the direct consequence.
A private individual from North Holland claims €279,000 from his bank — and loses
A private individual in North Holland took out a mortgage loan of €292,000 with a major bank in December 2017. By September 2018 he was already in payment default. What followed was not an abrupt termination, but three years of forbearance: over that period the bank agreed five payment arrangements. None of them was honoured. The bank repeatedly requested cooperation with an internal valuation and a private sale of the home. The individual refused both.
On 8 November 2021 the bank terminated the loan. On 9 February 2023 the home was sold at a foreclosure auction for €301,222. The individual then claimed €279,000 in damages for breach of the duty of care.
The District Court of North Holland dismissed the claims (ECLI:NL:RBNHO:2025:12488). For more than three years the bank had actively offered less drastic alternatives — an obligation that follows expressly from Section 7:128a DCC. The borrower had systematically refused to cooperate. Right up to the day of the auction the bank remained in contact in order to avert enforcement. The fact that the sale proceeds were lower than a kerbside valuation had suggested made no difference: an internal valuation — which the bank had requested earlier and for which the borrower had refused permission — confirmed in hindsight that the enforcement value was realistic.
Why did the customer lose? Because the bank did precisely what the court expects: offer alternatives, exercise patience, and press ahead only after systematic non-performance.
The legal test: the power exists, but its exercise is examined
The basic norm is set out in Supreme Court, 10 October 2014, ECLI:NL:HR:2014:2929. The Supreme Court confirmed that, while a contractual power of termination does exist, its exercise is tested against Section 6:248(2) DCC: it is not legally valid if that exercise, having regard to all the circumstances of the case, is unacceptable according to standards of reasonableness and fairness. In that test, express weight is given to the fact that, under Article 2 of the General Banking Conditions (ABV), the bank is to take account, to the best of its ability, of the legitimate interests of the client.
Three criteria emerge from the judgments analysed that courts apply in nearly every ruling.
Were less drastic alternatives offered? This is the first and most concrete question. For private individuals with a mortgage, Section 7:128a DCC imposes a special obligation to explore less drastic measures before proceeding to enforcement. Courts count payment arrangements, private sale attempts and temporary arrangements. The Amsterdam Court of Appeal confirmed this in ECLI:NL:GHAMS:2024:1383: the bank was permitted to terminate a mortgage after a temporary arrangement — entered into for three years, with an express end date — had not produced a lasting solution that fell within the applicable lending criteria. The bank had done its best; no more feasible alternative existed.
Did the bank run a genuine risk? A termination without a substantiated financial risk stands on weaker ground. The stronger the security relative to the debt, the harder it is to justify the bank definitively calling in the loan.
Was the ground for termination apparent to the borrower? A customer who has never been warned that particular conduct may lead to termination stands in a different position from one who has been expressly put on notice. Payment arrears are by definition apparent as a ground; other conduct is not always so.
That last criterion also colours the judgments on termination for conduct. In ECLI:NL:GHAMS:2021:2740 the Amsterdam Court of Appeal held that the bank was permitted to terminate a residential mortgage on account of persistent aggressive and threatening conduct by the private borrower towards staff — even though the customer had no payment arrears. Payment default is not a requirement; the ground need only be sufficiently serious and have been made apparent. The bank had attempted rehabilitation several times, had expressly warned the customer, and ultimately applied a notice period of six months instead of the contractual three. That was enough.
When does the bank go too far: a private individual and a business that did win
The cases in which banks fail the test generally share one common feature: the bank exercises its power without the actual risk or the actual ground justifying the intervention.
That was the position in ECLI:NL:RBROT:2016:8326. A private woman owned her own home and two let flats, financed with a mortgage lender. In September 2014 the bank terminated the credit agreement on account of letting without consent — a contractual ground for termination. The Rotterdam District Court rejected the termination.
The bank had been aware of the letting when it entered into the financing: the flats were listed as let in both the offer and the mortgage deed. The letting had been implicitly accepted from day one. The woman had never been warned that this could lead to termination. The bank had not demonstrated a genuine risk to its security: the flats served as collateral for other financing, second-ranking and outside its own loan. Moreover, the owner had had no payment arrears for five years. The actual trigger was an internal policy change: the bank no longer financed commercial property. That trigger did not outweigh the interest of the woman, for whom termination would almost certainly lead to a forced sale of the home and the loss of her sole source of income.
The same reasoning — no genuine risk, no fair opportunity — arose in the case of a business borrower, and there too the bank lost. In ECLI:NL:RBMNE:2024:1851 a pig farmer from Utrecht had had a credit relationship with his bank for sixteen years. The outstanding balance was €848,460; of an original financing of just over €2.1 million, nearly €1.3 million had already been repaid. On 1 August 2022 he requested a temporary credit increase. The bank asked him to provide a liquidity forecast. A day later he requested one extra day to submit that forecast. The bank replied the same day with a letter of termination — the forecast unread.
The District Court of Central Netherlands held that the termination was unacceptable according to standards of reasonableness and fairness. The debit balances on which the bank relied were short-lived and were consistently cleared within two days. The security far exceeded the debt. There was no genuine risk of non-repayment. The bank was ordered to pay €117,398 in damages.
The fact that this business case led to the same result as the private case from Rotterdam illustrates the heart of the doctrine: the protection of Section 6:248(2) DCC applies to everyone. The threshold is generally somewhat higher for private individuals — the loss of the home as a living environment weighs more heavily than a business loss — but the structure of the test is identical. A bank that terminates without a substantiated risk, without giving the customer a fair chance, and without taking its own duty of care seriously, will lose.
Can a bank terminate where there is a contractual power to do so?
A contractual power of termination is a necessary, but not a sufficient, condition. Its exercise is tested against Section 6:248(2) DCC. If the termination, in the given circumstances — having regard to the client's interests, the seriousness of the ground and the consequences — is unacceptable according to standards of reasonableness and fairness, it is not legally valid, even though the power is set out in black and white in the agreement.
What can a private individual do if the bank terminates the mortgage?
Responding in good time is essential. In preliminary relief proceedings (kort geding), an order prohibiting the enforcement sale can be sought. That requires a genuine argument that the termination fails the reasonableness and fairness test — for example, because the bank offered no alternatives, the ground for termination was already apparent at the outset and was never treated as a problem, or the risk on which the bank relies is not substantiated by facts. Waiting until the auction date approaches sharply reduces the scope for effective preliminary relief proceedings.
Does it make a difference whether you are a private individual or a business?
The structure of the test is identical: Section 6:248(2) DCC and Article 2 ABV apply to all credit relationships. The weighing of interests differs: for a private individual, the loss of the home as a living environment weighs more heavily. But businesses too can successfully challenge a termination, as the Utrecht pig farmer demonstrated when he pushed back his bank on a claim of just over €117,000.
District Court of North Holland, 22 October 2025, ECLI:NL:RBNHO:2025:12488.
Cited case law
Supreme Court: ECLI:NL:HR:2014:2929
Courts of Appeal: ECLI:NL:GHAMS:2024:1383 · ECLI:NL:GHAMS:2021:2740
District Courts: ECLI:NL:RBNHO:2025:12488 · ECLI:NL:RBROT:2016:8326 · ECLI:NL:RBMNE:2024:1851