Just like every year, I can predict what house prices and mortgage interest rates will do next year (2024). Before giving my prediction, let’s take a look back at my prediction for 2023.
What will 2023 bring us? I expect a bad year for real estate agents and mortgage advisors. The refinancing market is now really over and closed due to the high mortgage interest rates. I expect house prices to fall by 10%. This decrease is necessary to make owner-occupied homes more affordable. Mortgage interest rates will also drop somewhat, but this will not be much. My expectation is: maximum 0.5%. As a result, the interest rate for mortgages with NHG with a fixed interest rate period of 20 years will fall below 4% again.
Both predictions did not fully come true. House prices will have fallen in 2023. In May 2023 the decrease was almost 6% compared to May 2022 (cbs.nl). The decline has slowed down in the last months of this year.
The mortgage interest rate for the longer period has not changed much in 2023. The expectation that the 20-year fixed interest rate with NHG would be below 4% did not materialize. On December 19, Tulp was the lowest of all banks in the Netherlands at 4.12% with a fixed interest rate period of 20 years.
Bron: www.homefinance.nl
It was striking that the short-term interest rate (variable and 1-year fixed) was higher throughout the year than the interest rate for a fixed period from 5 years. Mortgage advisors and brokers will certainly not complain about 2023. The remortgage market has collapsed and additional mortgages for consumer purposes are also taken out much less often.
What will 2024 bring us?
Mortgage interest rates will drop somewhat. I certainly don’t expect a big drop. The decline will occur more in the short fixed interest rate periods. Various fixed interest periods (15 years and 20 years fixed) can fall below 4% again. The fixed interest period of 10 years can be increased to 3.5%.
Below are various interest rates for mortgages with and without NHG (date: December 19, 2023).
Mortgage with NHG Mortgage without NHG 1 year Argenta 4.00% Argenta 4.39% 5 years ABN AMRO 3.66% ABN AMRO 4.02% 10 years Rabobank 3.84% Vista 4.34% 15 years Lloyds Bank 4, 10% ASR 4.47% 20 years Tulip 4.12% ASR 4.47%
House prices will rise further by a few percent (5%) in 2024. This has to do with the scarcity of owner-occupied homes on the housing market. This will not be resolved in the coming years.
It is now really time for The Hague to come up with a good housing plan for the coming years. Many parents rightly complain that their child can no longer buy a home. From 2024 onwards, student debt will also be assessed differently for the maximum mortgage. Students who have to make repayments will face higher interest on their student debt. This ensures that less mortgage can be obtained on the income.
From 2024, sustainability (the energy label) will become an even more important topic. The higher the energy label, the higher the maximum mortgage on income!
Houses with energy label E/F/G become less interesting and will rise less in price (or even fall). The advantage is that from 2024 onwards, buyers can receive an extra amount for sustainability with the mortgage that is taken out. This allows them to ensure that the energy label of their purchased home increases.
For a single person with an income of €28,000, the maximum mortgage is increased by an additional amount of €16,000. In addition, as mentioned earlier, the energy label and energy saving resources come into play. This does not make the calculation of the maximum mortgage any simpler.
Below is an example of a single person with an income higher than €28,000.
Situation: single
Income €28,001
Key interest rate 4.2% Maximum mortgage on income Energy label Single person Energy-saving means 2023 €116,901 2024 E €119,504 €83,504 €16,000 €20,000 2024 C/D €119,504 €83,504 €5,000 €16,000 €15,000 2024 A/B €1 19,504 €83,504 €10,000 €16,000 €10,000 2024 A+ €129,504 €83,504 €20,000 €16,000 €10,000 2024 A+++ €139,504 €83,504 €30,000 €16,000 €10,000
To be clear: a homeowner must include energy-saving resources when determining the maximum mortgage amounts.
I’m very curious if all tools make the correct calculations for the maximum mortgage on the various websites. I expect problems with calculating the maximum mortgage in 2024. It is very wise for home buyers to agree on good resolutive conditions for financing.
2023-12-29 10:33:11
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