Surge in mortgage applications as buyers fear war-related interest rate increases

Despite a sluggish beginning, mortgage demand picked up over the first quarter of the year. A surge in applications toward the end of March played a key role in driving this increase, reports the Dutch Mortgage Data Network (HDN). Altogether, around 146,800 applications were recorded, an increase of 33 percent compared with the same period last year.

Most mortgage applications in the Netherlands pass through the HDN, a platform designed to streamline the lending process. This means its data typically provides an accurate reflection of trends in the mortgage market.

The year began on a subdued note, but a series of “record-breaking weeks” in March ultimately lifted the quarter into growth, reports the HDN. The organization points to escalating tensions in the Middle East, followed by interest rate hikes, as the turning point. Anticipating further increases, many borrowers hurried to apply for a new mortgage.

Growth in mortgage demand was largely fueled by renovators, retirees leveraging the value of their nearly repaid homes with second mortgages, and those refinancing existing loans. Together, they accounted for 63,436 applications, marking a 6.4 percent rise. Meanwhile, applications for home purchases reached 83,378, up 1.1 percent compared with the same period a year earlier.

The organization further observes a widening gap between first-time buyers and those already active in the housing market. It points out that new entrants are putting in more personal funds, taking on relatively higher levels of debt, and more frequently buying less energy-efficient homes, factors that add extra strain to their monthly costs.