How does the mortgage interest rate develop in February? Every month we provide our forecast based on the market figures in 2016.
At the end of December, the European Central Bank (ECB) expanded the crisis measures. The policy interest rates have been further reduced and the buy-back program has been extended to 2017. By making borrowing (mortgage and consumer credit) cheap, spending must increase.
Saving is made unattractive. Also read our savings interest rate forecast for 2016.
Market interest rates dropped
These measures ensure that market interest rates continued to fall in January. As a result, banks can get money cheaply (for lending) on the money market and capital market. These are important indicators for mortgage interest:
- The Euribor interest rate is an important indicator of the short-term mortgage interest rate, for example variable.
- The 10-year Dutch State interest rate is an important indicator of the long-term mortgage interest rate, for example 10-year fixed.
Lenders under pressure
A number of lenders have further reduced mortgage interest rates as a result of lower market interest rates. The other lenders will follow in February.
Interest rate cuts are implemented faster than before. The pressure on the lenders has increased:
- Competition on the mortgage market has increased.
- There is a lot of media attention for the low interest rates and the (still) high margins that lenders hold.
- It has become easier in 2016 for homeowners to lower mortgage rates.
Lowest point not yet reached
Not all mortgage rates have been adjusted yet, or a new interest rate drop is already in the pipeline. During the last ECB meeting, President Draghi said he would not rule out further measures . The falling oil price in particular ensures that inflation in the Eurozone is lagging behind the objectives of the central bank. These measures may be announced in March.
We therefore expect that mortgage interest rates will fall further in the coming period. Register for the interest rate flash and stay informed of interest rate developments.