8 June 2022
Why increasing mortgage interest rates shouldn’t scare you
Sezer Yilmaz

For the first time since the coronavirus outbreak, we are facing a significant increase in mortgage interest rates. We explain to you why rising interest rates shouldn’t put you off from entering the housing market and how they could actually benefit you.

No more competition from less savvy buyers

As interest rates rise, prospective homebuyers could leave the market to wait for better conditions which means that savvy buyers like you have fewer competitors!

Today's interest rates are still historically low

Buying a home while mortgage interest rates are rising is nothing to worry about, and the current mortgage rate is still relatively low from a historical perspective. For example, ten years ago, the average interest rate for first-time homebuyers was 4.53%, while in 2021, the average rate was 2.34%.

Higher interest rates - a sign of a recovering economy

When the economy is doing well, interest rates tend to rise. Increases in mortgage interest rates indicate that buyer confidence is returning and that increasing income and a tight labor market will help promote inflation over time.

Higher mortgage rates also indicate that investors feel more comfortable withdrawing money from the safer haven of bonds and reinvesting it in riskier investments such as stocks.

Borrowing conditions

Different variables can impact your mortgage amount, not only the interest rate. Focusing only on your mortgage rate shifts your attention away from the loan's actual cost, which can be a costly mistake. The lowest interest rate does not always equate to the best loan offer. You should ask your mortgage advisor about the possibility of taking your current low-interest rates to your new home or the options around early repayments.

The situation in the Netherlands

In the first quarter of 2022, the number of mortgage applications reached a new high. Refinancing an existing mortgage led to increasing applications in the first quarter of 2022. Despite rising mortgage rates, buying a house is still a good investment compared to renting your home. The housing market is emerging from a period of historically low-interest rates, and despite growth, it remains historically low.

Mister Mortgage offers financial advice and services to people looking to buy property in the Netherlands. If you have any questions regarding mortgage interest rates and how they might affect you, or any other questions you have regarding purchasing property in the Netherlands, do not hesitate to get in touch with their experienced and professional team. 

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Meet the team
Sezer Yilmaz
Robin Uijtdehaage
Client Director & Financial Specialist
Egle Kemezyte
Growth Marketer
Lisa Grondsma
Financial Specialist