Interest on 30 year mortgage down to 2 percent
The falling mortgage rate broke a new record on Monday. For the first time in Netherlands history, the interest for the longest fixed-interest mortgage period of 30 years dropped to 2 percent, AD reports based on figures from Actuelerentestanden.nl.
The mortgage provider that broke this record first was Reaal with its annuity mortgage called Lekker Wonen. The interest rate only applies to homes that are eligible for a National Mortgage Guarantee - homes with a value up to 290 thousand euros.
The lowest interest rate for a 20 year fixed-interest mortgage is currently offered by Robust at 1.68 percent. The ABN Amro budget mortgage currently has the lowest interest rate at 1.14 percent for 10 years.
The low mortgage interest rate is due to the European Central Bank setting a negative interest rate. Banks now have to pay to keep their money at the ECB. This also resulted in a low savings interest rate. In this way the ECB wants to encourage people to spend their money and thus boost the European economy, according to the newspaper.
Hans Andre de la Porte of homeowners association VEH called the low mortgage rates unprecedented. "I have never seen interest rates fall so extremely", he said to AD. "Although most mortgages are still fixed at 3 percent for 30 years, but that is also very low. I advise home buyers to look critically at the conditions, because the mortgages with the lowest interest rates often have some disadvantages. For example, you cannot always take the interest rate to the next house, or you can only repay up to 10 percent without penalty."