Where does your search for a new home begin? Well, mostly on Funda of course. But before you seriously start looking for a home that you can actually afford, it is useful to first sort out your finances.
How much can I borrow maximum? What do I want to spend on housing costs each month, so that I can also do fun things? How much can I bid?
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Add one percentage point
Due to the housing crisis, there is a good chance that you did this calculation months ago, but are still looking for Funda. Then it is good to realize that something has changed. Mortgage interest rates have risen sharply in recent times.
The interest rate on the most popular mortgage, an annuity mortgage with a fixed interest rate for 20 years, has fallen by almost one percentage point since January 1. increasedcalculated Van Bruggen Adviesgroep.
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Anyone who takes out a mortgage with the National Mortgage Guarantee (NHG) pays an average of about 2.4 percent in interest. Anyone who buys a house without an NHG – and that should in principle be the case for all houses above 355,000 euros – pays an average of almost 2.8 percent interest. After years of continuously falling interest rates, that is a bit of a mouthful.
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The math: higher interest rates hurt
But what does this mean for your monthly payments? Suppose you bought a house for 350,000 euros and you financed it completely with an NHG mortgage. Then your gross expenses are 174 euros per month higher than a few months ago. Fortunately, the mortgage interest deduction somewhat eases the pain. Net you are 66 euros more expensive per month.
On the other hand, you pay off an annuity mortgage more slowly if the interest rate is higher. And that hits harder. If we look at a period over ten years, your total costs are almost 20,000 euros higher due to the higher mortgage interest. Simply put, 2000 euros per year.
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What can you do?
To get the monthly costs down, more and more people are opting for a interest-free part, says Martin Hagedoorn of De Hypotheekshop. This means that the mortgage debt always remains higher.
Another option is to choose to fix the interest for a shorter period. That also happens a little more often than before, sees Hagedoorn.
Oscar Noorlag, market expert at Van Bruggen Adviesgroep, advises home seekers to keep an extra margin when making your offer, especially now that interest rates are rising. It is not possible to move to another lender, he explains. “We now see that almost all lenders raise their interest rates every week.”
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Slightly less mortgage
You would think, if the interest rate rises, and with it the monthly costs, then less can be borrowed. That is also the case, although it is not about very large amounts. A couple earning twice the average and opting for the maximum NHG mortgage can borrow 7,000 euros less than before.
However, that can be the difference between the winning and the losing bid. But because most people do not borrow to the maximum, this rarely happens, Hagedoorn explains. “Although there is of course a part that lends as much as possible. Mainly starters in the Randstad. They can suffer more from it.”
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Problems seem to be okay
Although a higher interest rate for home seekers is not fun, the problems are not too bad. Both Noorlag and Hagedoorn see that most people know what they can borrow when making an offer. It is also not the case that many more people are not getting their financing now.
Also brokers see no shift due to the higher interest rates. “We see that buyers are preparing very well when they make an offer. So they know how long their pole is,” says spokesperson Marc van der Lee of real estate association NVM.
Anyone who hopes that house prices will fall as a result of this higher interest rate will be disappointed. The enormous shortage in the housing market is still far too dominant for that.
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