Significantly fewer mortgages were taken out in the Netherlands last year. With 236,564 applications, almost 8 percent fewer mortgages were taken out than the year before. Residents of the Netherlands also borrowed less on average. The average mortgage amount was around 252,000 euros, which is about 10,000 euros less than in 2022. This is evident from annual figures from Mortgage Data Network (HDN), which takes care of the application process for mortgages and to which almost all major mortgage providers and financial advisors are affiliated. .
One of the major causes of the decline in the number of applications is the mortgage interest rate, which was much higher in 2023 than in previous years. With a higher mortgage interest rate, prospective buyers can borrow less and their monthly costs are higher – which also affects house prices.
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In the first months, mortgage interest rates rose to around 4.9 percent, before falling back to around 4 percent in the last quarter. With the falling mortgage interest rates in the last weeks of the year, many home seekers seem to have made their move. The number of mortgage applications shot up to almost 93,000 in the last quarter.
Good year for starters
For those looking for a starter home for less than 350,000 euros, 2023 was a good year according to HDN. With new rental regulations on the horizon, residential investors offered many rental properties for sale last year, providing more choice for buyers in the lower segment. What is striking is that the share of buyers who opted for a home that falls under the protection of the National Mortgage Guarantee has increased by a third.
Mortgages for more expensive homes were taken out less than in 2022. In particular, 'upstream buyers', another word for buyers who take out a mortgage for a home that is significantly more expensive than the market value of the current home, were largely absent in 2023, according to HDN. .
The energy performance of homes has also become a price-determining factor since the energy crisis of recent years. The average mortgage for a home with energy label A or higher was 517,250 euros, which is almost 72,000 euros higher than the average for all homes. Additional money is also borrowed more often to finance energy-saving measures such as insulation or a heat pump.
The total mortgage market consists of all applications for the purchase of a home, plus second mortgages on a home or a refinancing of a current mortgage. The additional and refinancing market in particular will “virtually dry up” in 2023, according to HDN. For many homeowners, additional or refinancing due to the increased mortgage interest rate would mean that their monthly costs would increase significantly. Relatively many owners have also retaken their current mortgage at the beginning of 2022 in order to avoid interest rate increases. As a result, the entire mortgage market shrank to 368,442 mortgage applications, a drop of almost a third compared to 2022.
The entire mortgage market has been on a downward trend since the beginning of 2022. Only in the fourth quarter of last year was a remarkable annual increase visible again, partly thanks to falling mortgage interest rates.
Later this week, the real estate agency NVM will release annual figures on the number of homes that changed ownership last year. Considering the first three quarters, it is expected that the number of home sales and house prices will have fallen throughout 2023.
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