Mortgages with a shorter fixed-rate period are becoming increasingly popular

The number of applications for a mortgage with a relatively short fixed-rate period increased considerably in the first five months of this year, De Hypotheker reported. The mortgage advisor has also observed that the number of mortgage applications with a more extended fixed-rate period is decreasing. They expect this development to continue because the mortgage rates will continue to drop slightly.

De Hypotheker saw an increase of 22 percent from January to May regarding applications for a mortgage with a fixed-rate period of under 15 years. The number of applications has even more than doubled compared to 2022. This shows that most home buyers now prefer a mortgage with a shorter fixed-rate period, said De Hypotheker.

These applications are at the expense of mortgages with a more extended fixed-rate period of between 15 and 30 years. The number of these types of mortgages dropped eight percent compared to last year, and dramatically more compared to 2022. The mortgage advisor added that the number of mortgages with these fixed-interest periods has shrunk from 84 percent in 2022 to 38 percent this year.

"More and more home buyers are choosing for short or medium fixed-rate periods in the expectation that the mortgage rates will be lower at the end of the fixed-rate period," De Hypotherker's commercial director Mark de Rijke explained.

He referred to the fact that the European Central Bank lowered interest rates for the first time in five years last week. "As a result, mortgage rates are likely to drop slightly or remain stable in the coming period, which could lead to more home buyers looking at how they can take advantage of this."

According to De Hypotheker, the mortgage rates were an average of 3.95 percent at the beginning of May for a mortgage with a National Mortgage Guarantee and a fixed interest rate of ten years. They had dropped slightly to 3.90 percent at the end of May.

"Considering that the mortgage rates rose sharply in 2022, the fees at this moment are much higher than in the five years before 2022," De Rijke stated. "This has partly led to the difference in preference from home buyers."