Mortgage interest rates rise again, but will this impact house prices?

Social housing in Amsterdam. Photo:

Mortgage interest rates in the Netherlands are rising, and have gone up 0.45 of a percentage point to 1.85% for a 20-year fixed rate mortgage, the Financieele Dagblad reported on Tuesday.

The sharp increase takes mortgage rates to their highest level since August 2019, and it is, according to experts, unclear when the increase will slow down again.

Nevertheless, rates are still low when compared with a decade ago. In 2011, for example a home buyer would pay 6% interest on a 20-year fixed rate loan.

The low rates over the past 30 months were ‘bizarrely low’, according to Oscar Noorlag, of mortgage advisory group Van Bruggen. ‘And they are still extremely modest.’

Mortgage advisors also say rising interest rates could have an impact on house prices, if the increase becomes substantial, because households will be able to borrow less capital to invest in a property.

National statistics agency CBS said on Tuesday that house prices were up 21% in January, the highest rate since its records began.

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