Ten-year mortgages fall below 2 pct, fueling housing boom

For the first time in history 10-year-fixed-mortgage interest rates fell below 2 percent at a number of providers, according to figures from De Hypotheekshop. Home buyers could not wish to be luckier than with this unprecedented low mortgage rate, which is expected to fuel the housing boom, the Telegraaf reports. Banks and insurers Allianz, Argenta and Hypotrust are offering their 10 year fixed mortgages at 1.95 percent and 1.99 percent respectively. This is the first time the rates drop this low. The average for 10 years fixed interest mortgages has always been around 5 to 6 percent. Mortgage rates continue to fall due to developments in the capital markets. Banks can borrow increasingly cheaply from each other and the European Central Bank. This means that mortgage interest rates can be reduced. The historically low mortgage rates is a major driving force behind house sales and price developments in the housing market. According to the newspaper, the national price increase was 4.1 percent in January, the highest in eight years. Though the average selling price is still 15 percent below the peak in August 2008.