Mortgage rates surge to highest levels in 18 months

Mortgage rates in the Netherlands have risen for the third consecutive week, marking the steepest increase in 18 months, according to De Hypotheekshop and Ingage-Aetos. The rise has particularly affected rates for mortgages with Nationale Hypotheek Garantie (NHG) and has prompted a surge in mortgage applications as consumers seek to lock in rates before further increases.

The average 10-year fixed mortgage rate climbed by 0.11 percentage points to 3.65 percent, while the 20-year fixed rate increased by 0.12 percentage points. In total, approximately 80 percent of more than 40 mortgage lenders raised their rates, marking the highest number of increases since mid-2023. Among the lenders, Aegon and Triodos maintained their rates, but most banks and insurers followed the upward trend.

This week alone, mortgage applications—including purchases, refinancing, and adjustments—rose by 30 percent. Many consumers rushed to take advantage of still-relatively low rates before further hikes. Despite the recent increase, current rates remain 0.9 percentage points lower than a year ago, according to Ingage-Aetos.

The rising mortgage rates reflect broader economic and geopolitical trends. Financial markets have responded to higher oil and gas prices, along with inflation concerns. The European Central Bank is reportedly considering multiple interest rate cuts to stimulate the economy, while U.S. financial markets remain volatile following the re-election of Donald Trump. Investors anticipate higher U.S. national debt levels, which could slow inflation reduction or reignite it.

Although economists foresee potential short-term rate increases, many predict a decline later in 2025 as market conditions stabilize.

Mortgage advisors report a significant uptick in refinancing activity. Borrowers are increasingly shifting mortgages from inactive lenders—those no longer offering new mortgages—due to high renewal rates. Inactive lenders often charge renewal rates up to 1 percentage point higher than competitive market rates.

In many cases, refinancing occurs without penalty after the fixed-rate period ends. Some homeowners with expiring 30-year mortgage terms are forced to find new lenders, as inactive lenders do not offer extensions.

Experts advise borrowers nearing the end of their fixed-rate periods to compare options before accepting renewal offers. Exploring alternatives can yield significant savings and provide an opportunity to reassess financial goals.