And if there is one sheep over the dam, more often follow, at least the expectation of the Van Bruggen Adviesgroep, a large independent mortgage advisor.
More money out than in
The reason for banks and other providers to raise mortgage rates is the increased market interest rate. That is the rate at which the banks themselves can borrow money and that has increased in recent months.
As a result, the margins for the mortgage provider are shrinking – at least, as long as the mortgage interest rate remains low. More money is going out than coming in.
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In the highly competitive mortgage market, providers are generally not eager to raise mortgage rates, according to Van Bruggen’s advisers, for fear that consumers will take out their mortgage with competitors.
Increase
Due to the shrinking margins, they are now taking that risk anyway. Last week, several mortgage providers raised their interest rates, to an average of 1.54 percent fixed interest for a mortgage with a 30-year term. The rates for 10 and 20 years have also increased.
The providers see themselves strengthened by the fact that market leader Rabobank is also taking the step to raise the mortgage interest rate. Partly because of this, Van Bruggen expects a series of mortgage interest increases in the coming period.
Also the mortgage interest barometer of De Hypotheker provides a rise in long-term interest rates in the coming week.
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“Now that the first lenders have increased their mortgage rates, we expect other lenders to follow. With possibly several rounds of increases,” according to the advisory group.
Van Bruggen also calls it ‘remarkable’ that the increases, in contrast to the reductions of recent months, quickly amount to 5, 10 or even 15 hundredths of a percent.
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