Almost all lenders raised mortgage rates for the third straight week last week. The average increase was approximately 0.15 percentage points, with peaks of no less than 0.40 percentage points.
For a ten-year fixed interest period, you now pay an average of around 4.5% interest now, and according to property market professor Peter Boelhouwer from TU Delft, this has everything to do with rising interest rates. capital market interest. So he calls it logical augmentation. “It was even a bit higher before,” he says, referring to January 2023. “But long-term interest rates have risen again in recent weeks. 10-year government bonds are now just over three percent, which is a record. It hasn’t happened in the last eleven years.”
“This hasn’t happened in the last eleven years”
In response, the European Central Bank is likely to raise interest rates again by half a percentage point, although Boelhouwer points out that this is not directly related to long-term interest rates. ‘But the variable mortgage interest rate will continue to rise. It is now almost as high as the 10-year interest rate.’
In time
Boelhouwer also expects capital market interest rates to rise in due course, although this depends mainly on supply and demand. And mostly because inflation is so high, he thinks it’s in the offing. “Of course, suppliers and buyers also take inflation into account.” Boelhouwer therefore calls it an explanation that long-term interest rates will also rise.
If interest rates continue to rise as well, Boelhouwer expects the housing market to cool as well. Because where mortgage interest was still about one and a half percent last year, the percentage is about 4.5 percent. “That makes a 50 percent gross difference on your annual expenses.” So you can borrow much less than in the past, and this has consequences for price developments.’
Source: BNR
Andrew Dwight is an author and economy journalist who writes for 24 News Globe. He has a deep understanding of financial markets and a passion for analyzing economic trends and news. With a talent for breaking down complex economic concepts into easily understandable terms, Andrew has become a respected voice in the field of economics journalism.
