Lack of banking competition forces mortgage rates up: home owners

A lack of competition in the mortgage market means mortgage interest rates are 1.3 percentage points higher than they should be, according to home owners’ lobby group VEH.

The VEH wants MPs to put pressure on ministers to limit the amount of profit banks can make on mortgages. Banks which break the rules should be subject to large fines, the organisation says.


The VEH’s demands come in the form of a petition signed by 125,000 people.


The organisation says that with three of the four big banks enjoying state support, the way mortgage rates are calculated has become distorted. This is because the banks which have had state cash are more restricted in what they do.

Foreign competition

Last month, housing minister Stef Blok told Elsevier magazine he hoped more foreign banks would enter the Dutch mortgage market and beef up competition.


In the past they had been surprised by the fact people can borrow more than the value of their homes, and at the popularity of interest only mortgages, Blok said.


Now changes have been made, Blok said he hoped this would encourage foreign banks to come to the Netherlands.


The competition authority NMa is currently investigating the Dutch mortgage market, which is dominated by the big four banks.

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