Banks make ‘extra profits’ over low mortgage interest rates: home owners

apartment for saleBanks and other mortgage providers made over €6bn between mid-2009 and mid-2014 in ‘extra profits’ due to falling interest rates, home owners’ lobby group VEH said on Wednesday.

Low interest rates are camouflaging the high profit margins which banks are making on mortgages, the VEH says. The organisation bases its claims on figures from Amsterdam University.

While home owners and buyers are happy with low interest rates, banks are profiting even more. In September this year, for example, they were adding an extra 0.89 percentage point to mortgage interest rates, which is twice as much as they were adding on at the beginning of this year, the Volkskrant says. This is around €175 a month on a mortgage of €200,000.

The VEH said the Dutch mortgage market needs more competition and that 80% of the mortgage market is in the hands of a few Dutch banks. It wants the government to take action to ensure home buyers get a fair deal.

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