Wednesday, 6 August 2014 - 11:46
Mortgage rate hits new record low
Since recording started in 1965, the mortgage rate has never been so low. For an average, 10-year mortgage, with National Mortgage Guarantee, the rate is now less than 3.5 percent, the NOS reports. These figures from De Hypotheekshop show the significant drop from 4.05 percent recorded still at the start of the year. The mortgage rate is dropping because capital streams to safer investments due to the political and economic tensions elsewhere in the world. Safe-havens for investors are currently taking shape especially in German and Dutch government bonds, causing a rise in demand for these debt securities. Hereby, the interest rate and the efficiency on state debts is going down. According to the report, a Dutch ten-year government loan on the capital market only has an interest rate of 1.34 percent. Mortgage loans with a longer running time are covered with long-running and secure loans such as government bonds. The NOS writes that the price of money is also dropping, meaning that mortgages also become cheaper. Because the housing market is only now starting to slowly recover, there is also less demand for mortgage loans.