Explosive increase in mortgage applications as interest rates rise

The number of mortgage applications increased explosively in the first quarter of this year, compared to the same period in 2021. The increase was entirely due to applications for refinancing an existing mortgage as homeowners try to stay ahead of rising interest rates, De Hyphotheker and Hypotheken Data Netwerk (HDN) found in their separate figures.

According to De Hypotheker, the total number of mortgage applications increased by almost half. Applications for refinancing an existing mortgage jumped +117 percent and for home improvement jumped +101 percent. Mortgage applications to buy a home fell by -0.3 percent. Despite this, the housing market does not seem to be cooling, the mortgage advisor said. The scarcity of affordable housing remains high, and home prices are expected to climb by an average of 12.5 percent this year.

"Many homeowners have refinanced their mortgage to take advantage of the lower mortgage interest rate. This has been rising since January, and we expect interest rates to rise even further in the coming period," De Hypotekher chairman Michel van den Akker said. "Many homeowners are also renovating or making their homes more sustainable. Especially now that energy prices are so high, we expect this trend to continue."

HDN registered 191,293 mortgage applications in the first quarter, 37.1 percent more than in the same period last year. The majority of the applications (119,301) were for refinancing existing mortgages. "Due to the rising interest rates, the number of mortgage applications in the non-buyer market grew by 75.4 percent this quarter," HDN said.