Lenders largely reducing mortgage interest rates, mortgage advisors say

Banks and other organizations issuing mortgages have further reduced their mortgage rates this week, says independent mortgage advisory firm De Hypotheekshop. Interest rates have now fallen for eight weeks in a row.

The fact that mortgage rates are falling has to do with the reduced interest rates on the capital market. Some financiers even dropped interest rates by 0.2 to 0.3 percentage points, the organization said.

Most lenders now offer an interest rate below 4 percent on certain mortgages. This concerns fixed 10-year mortgages covered by the National Mortgage Guarantee (NHG). The NHG ensures that buyers can get a lower interest rate, and offers a safety net if housing prices fall. Homeowners then have the guarantee that they will not be left with a residual debt.

On some mortgages, the interest rate has fallen the most in a week since 2008, when De Hypotheekshop started keeping records. This is the case with fixed mortgages covered by the NHG with a term of five, ten and twenty years, according to the organization.

Earlier Friday, Statistics Netherlands (CBS) and the Kadaster national land registry office announced that the price index for owner-occupied homes rose for the fifth consecutive time in November, when compared to a month earlier. Home values are now nearly 1 percent lower compared to a year ago, suggesting that the recent dip in housing prices is nearing an end. This is a sign that a moment is arising when housing prices will rise again when compared annually, said De Hypotheekshop.

The consultancy group also said that bidding above the asking price and purchasing a home without restrictions or reservations has again become more common in many cities. "Mortgage advisors in Utrecht and The Hague report that overbidding by 10 percent has already become the norm."

Halfway through last year, many home buyers had to outbid and complete purchases without reservations in the tight housing market. Earlier this year, prices went down a bit and buyers were less pressured to commit to purchases without reservations. In October, De Hypotheekshop also reported that overbidding and purchasing without reservations were becoming more common again.