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Mortgage news: Penalties, interest-rate expectations and the NHG limit in 2017

Finsens specialises in financial planning for individuals and families in the Netherlands and provides full support during the entire mortgage process, from start to finish.

Rules concerning mortgages change regularly, so it's important to stay up to date. This article will feature information about mortgages including the recalculations of penalty interests, what interest rates will be doing in 2017 and the new maximum purchase price of a property for NHG-backed mortgages.

Penalty interest

On March 20, the Dutch Financial Markets Authority of AFM (Autoriteit Financiële Markten) published a set of guidelines containing rules for banks to calculate penalty interest rates more fairly when mortgages are prematurely redeemed. 

Research has shown that in many cases, banks calculate excessively high penalty interest rates. Penalty interest usually does not apply in the event that the mortgage is redeemed as part of the sale of the property; in such cases, most banks allow penalty-free redemption of the mortgage.

The new AFM calculation rules do not apply to the penalty interest levelled in the event of interest revision using the average of one’s original rate and the current market rate.

Banks will be recalculating the penalties for all mortgage switches made after July 14, 2016. Most banks have indicated that they will be informing their clients of the issue in the coming months. ABN AMRO is giving itself a bit more time, claiming their clients will be informed within a year.

Due to European legislation on the matter, banks are currently obligated to recalculate the penalties. Banks will not be recalculating the penalty interest rates for any mortgage switches (and penalty interest calculations) made prior to July 14, 2016.

Interest rate expectations 

For the first time, the inflation objective of 2 percent was met in February. However, the economy is not showing any real signs of strengthening yet. At the end of 2016, the ECB (European Central Bank) extended its buy-back programme to December 2017.

Unlike the sharp decrease in interest rates like in 2016, the EU’s monetary policy will curb mortgage interest rates again in 2017.

On the other hand, interest rates will remain unpredictable this year. Despite this, the maximum difference between the highest and lowest interest rate thus far is only 0,3 percent.

ABN AMRO expects the flat, 10-year interest rate to be around 0,5 percent higher by the end of 2017.

Mortgages with National Mortgage Guarantee (NHG)

The lowest interest rates are offered to mortgages which fall under the Dutch National Mortgage Guarantee scheme. Compared to mortgages at property market value, the annual difference is around 0,5 percent.

However, NHG-backed mortgages require homeowners to pay a one-off 1 percent fee. A NHG-backed mortgage is possible if the purchase price of the property does not exceed 245.000 euros.

In 2016, the maximum purchase price was set at 231.132 euros. As such, 2017 marks an increase in this maximum purchase price for the first time since it started decreasing in 2012.

Do you need more information about your own particular situation? Contact Henk van Seijen, a partner at Finsens, providing specialist services to expats in the areas of tax, mortgages, pensions and investment advice.
 

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Henk

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Henk van Seijen

With 20 years of experience Henk van Seijen is the professional to contact mortgages and financial planning. He is partner at Finsens.

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AMBERERIN 09:31 | 26 January 2019

Hi everyone am AMBER ERIN, I do hope my post gets read and hopefully helps somebody along the line.i will never forget the help the wonderful spell caster Dr Larry render to me in my marital life. i have been married for 4 years now and my husband and i love each other very dearly . after 4 years of our marriage my husband suddenly change he was having an affair with a lady outside, i notice it then i was praying for divine intervention but nothing happen. my husband just came home one day he pick up his things and left me and the kids to his mistress house.. At this time i was confuse not knowing what to do. i was so depressed and had to tell a friend who told me how a spiritualist helped her out with her marital problems so i contacted him and i told him my problem and after he made some consultations he told me what went wrong with my husband and how it happened, that he will restore my marriage but i never believe him. To my greatest surprise 3 days after he has cast the spell my husband came to my office begging me on his knees that i should find a place in my heart to forgive him that he is very sorry for everything he has done to me and the kids .... now am happy we living happily with my husband and kids...thanks to the help of the great Spiritualist Dr Larry, contact him with any problem and am sure he will help email assurancesolutionhome@gmail.com website https://assurancesolutionhome.blogspot.com http://assurancesolutionhome.website2.me/ whatsapp him on +1(424)-261-8520