Mortgage interest rates to continue steady downward trend, mortgage advisor says

The interest on a 10-year mortgage with National Mortgage Guarantee has dropped a full percentage point since it peaked in October 2023, De Hypotheker reported. The mortgage advisor expects the slow, but steady decline in mortgage interest rates to continue.

Currently, the average mortgage interest rate for loans with a 10-year term and National Mortgage Guarantee is 3.55 percent - exactly 1 percent lower than the highest point in 2023, which was 4.55 percent at the end of October.

The decrease is due to lower interest rates on the capital market and the European Central Bank (ECB) reducing its rates now that inflation in the eurozone is around the 2 percent target. The capital market interest rates have fallen sharply in recent weeks. And “the signals are green” for the ECB to lower its rates by another 0.25 percent in December, De Hypotheker said. “Although the tight labor market is still causing wage increases - which can put upward pressure on inflation - a turning point seems to have been reached.”

On balance, De Hypotheker expects a slight decrease in the average mortgage interest rates in the coming months.

Mark de Rijke, the commercial director of De Hypotheker, expects that more home buyers will take advantage of the lower mortgage interest rates. “A quick calculation shows that a couple with a joint income of 90,000 euros at an interest rate of 4.55 percent could borrow approximately 419,000 euros a year ago. With an interest rate of 3.55 percent, this is now almost 440,000 euros. This amounts to a difference of over 20,000 euros and that is a positive development for home buyers in about one year.”