Mortgage rates climb again, first-time buyers face higher costs

Mortgage rates have climbed again in the past few weeks following a period of decline. Although the increase of around 0.15 percentage points may seem small on paper, it is felt by homebuyers. Rates for a ten-year fixed mortgage are now roughly back to where they were at the start of the year, NOS reports.

Mortgage advisor Van Bruggen calculates that first-time buyers could be paying about 30 euros more per month in mortgage costs due to the recent interest rate increase compared with a few weeks ago.

The average 10-year fixed mortgage rate with the National Mortgage Guarantee (NHG) has climbed to approximately 3.76 percent. In the past week, the widely used 10-year mortgage rate rose by 0.08 percentage points.

Leading mortgage providers, including ABN AMRO, Argenta, Obvion, and Munt Hypotheken, have signaled additional rate hikes this week. The European Central Bank (ECB) announced on Thursday that they are keeping interest rates unchanged at 2 percent.

The rising rate also means people can borrow less under the same income standards; for a first-time buyer looking to purchase a home around 365,000 euros, this could reduce borrowing capacity by roughly 6,000–7,000 euros compared with lower rates.

Van Bruggen notes that the rise builds on an already elevated interest rate and hits first-time buyers harder than homeowners looking to move.

NOS reports that this recent upward trend is partly linked to geopolitical concerns, such as the war in the Middle East, that are causing volatility in the financial markets. Financial market investors are asking for higher rates to offset risk amid the uncertainty. Currently, rates on the capital market are climbing more quickly than mortgage rates.

Van Bruggen does not expect interest rates to spike as sharply as they did in 2022, but anticipates they could continue to rise somewhat as long as this uncertainty persists.