Mortgage interest rates hit highest point of the year, more hikes expected

After rising steadily for weeks, mortgage interest rates in the Netherlands have, in many cases, now reached the highest level seen so far this year. The global economic situation means more hikes are to be expected, according to experts. 

Mortgages becoming more expensive in the Netherlands

The past few weeks have seen multiple mortgage providers in the Netherlands bump up their rates. Last week, no fewer than 30 lenders announced they were increasing interest rates, in some cases by more than 0,25 percentage points in one go, according to BNR. 

The average interest rate for a 10-year fixed rate with the National Mortgage Guarantee (NHG) is now 3,79 percent, according to De Hypotheker - that’s close to the peak seen earlier this year at 3,81 percent - and way above the lows of as little as 1 percent seen in recent years. 

Rates on longer fixed-term mortgage products have climbed even higher. The 20-year and 30-year interest rates with NHG have already hit their highest point this year (4,2 percent and 4,34 percent, respectively). 

All of this makes borrowing more expensive, increasing monthly repayments on mortgages and overall making buying a house in the Netherlands less affordable. 

Why are mortgage interest rates rising?

According to De Hypotheker, the rate hike is partly due to tensions on the financial markets, with major players like the US and European Central Banks easing back on interest rate cuts due to economic uncertainty. "European economic growth is under pressure, caused by factors such as geopolitical tensions, global stagnation, and the uncertainty surrounding US trade tariffs," De Hypotheker told BNR.

On top of this, governments around the world are taking on increasingly large debts. “More and more countries are planning substantial investments, creating high demand for loans on the money market. This is also driving up interest rates, particularly those on long-term bonds,” BNR explains. 

Unfortunately, it looks like the rises will continue in the immediate future, making borrowing more expensive in the coming year. "Given the rise in capital market interest rates, we expect long-term mortgage rates to continue to rise slightly in the coming period,” De Hypotheker said.