Banks: fewer risk cases with interest-only mortgage | Money

Mortgage lenders started a campaign in 2018 to alert customers to potential problems that could arise after the mortgage expires. A possible increase in monthly costs would then become untenable for some.

The percentage of customers with an interest-only mortgage that may run high risks of payment problems is 5.9% of the total, according to the Dutch Banking Association. Two years ago, that was 8%.

Lenders have now checked with almost 144,000 customers with an interest-only mortgage whether they can also bear their monthly payments in the future. Action was needed in 31%. Of that group, 10,000 households have taken measures so far, according to the NVB.

Problems with interest-only mortgages can arise at the end of the term for the loan. Customers then have to make repayments or take out a new mortgage. In that case, the monthly costs can rise considerably.

The Netherlands Authority for the Financial Markets (AFM) estimated last year that some 2.7 million households had a full or partial interest-only mortgage. That amounted to a total amount of € 310 billion in interest-only mortgage debt.

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