Demand for mortgages plummets as interest rates rise

With mortgage interest rates rising rapidly, far fewer people applied for home loans in the third quarter. There was less demand for the transfer of existing mortgages in particular, but fewer home buyers also knocked on the bank’s door for a mortgage. That indicates that the housing market is cooling down further, De Hypotheker reported based on its own figures.

According to the chain of mortgage advisers, the total number of applications decreased by 20 percent compared to the same period last year. Lenders received three-quarters fewer requests to refinance a mortgage. The number of applications for a mortgage to purchase a house fell by 7 percent.

The increased interest rates mean home buyers can usually borrow less money. The average mortgage amount also reflects that. In July, August, and September, this was 309,000 euros, according to De Hypotheker. A year earlier, it was 324,000 euros.

The demand for mortgages rose again at the end of the third quarter, but not enough to offset the sharp decline in the previous months, said De Hypotheker commercial director Menno Luiten. “In August, this decrease was 15 percent. In September, we reached a tipping point and saw a slight increase of about 3 percent. That is a positive development.”

According to De Hypotheker, it is striking that young home buyers more often applied for a mortgage to buy a home. In the age group up to 35, the number of applications rose by 13 percent.

The number of applications for a loan to make a home more sustainable rose by 9 percent, a much smaller increase than in the second quarter. Then, the number of applications for a sustainability mortgage increased by almost half compared to the second quarter of last year.