Mortgage interest rates doubled in past months
Due to inflation driving market interest rates higher, mortgage interest on multiple popular rates increased sharply since October last year, Van Bruggen Adviesgroep said on Monday. For example, the fixed interest rate for ten years with National Mortgage Guarantee (NHG) doubled, and the fixed rate for 20 years with NHG increased from 1.33 percent to 2.36 percent, NU.nl reports.
Market interest rates are the interest rates charged on the capital market, for example, when banks lend money to other banks. The banks pass on the extra interest they have to pay on to customers in their own products, like mortgages for home buyers.
The higher interest rates are especially annoying for first-time buyers because, in addition to higher costs, they also mean you can borrow less, Van Bruggen Adviesgroep said. Where people moving from one owner-occupied home to another can take advantage of the equity of their current home, first-time buyers don't have that option. Although the consultancy firm added that the decrease is only a few thousand euros compared to October.
First-time mortgage lenders also tend to get a higher interest rate than if they're taking out a second or third mortgage, Van Bruggen Adviesgroep said.