I believe the Netherlands used to allow full tax write-off of the mortgage interest (dunno if they still do). That certainly is bound to heat up the market.
Also, it's no longer always a full write off, it's a write off at a capped rate. Those with low incomes have a full write off, those with high incomes see a more limited effect.
It is tax deductable, so you are taxed less, typically max 50% of the interest sum.
It can be a misleading to say this means only 50% or 37% of your interest can be deducted. It could still be fully deducted. i.e. if your income is taxed at 37% rate, then the 37% rate of 2023 will mean your entire interest can be deducted from your income (100% interest deduction).
It means that at higher progressive tax rates for higher incomes, e.g. at 50%, only 37% of the 50% can be deducted.