Dutch people are fixing the low mortgage interest rate for longer. Smart, but also more expensive and not always necessary. This is how you choose the fixed-interest period that suits you.
Secure low mortgage interest rates for a long time
The mortgage interest is historically low. To benefit from this for a long time to come, Dutch people are fixing mortgage rates for longer. The following chart with the average fixed-interest period shows this trend clearly.
A few years ago, the 10-year fixed-interest period was the most popular, now it is fixed for 20 years. Even the fixed-interest period of 30 years is on the rise.
How long to fix the mortgage interest?
With a long fixed-rate period you opt for the certainty that the mortgage interest rate will remain the same for a longer period. A long fixed-interest period is therefore also somewhat more expensive. With the low mortgage interest rates at the moment, this is very interesting, but not for everyone.
The best time to fix the mortgage rate depends on the following factors:
1. How does the mortgage interest rate develop?
- Long: By fixing the mortgage interest for a long time, you anticipate rising interest rates in the future. The interest rate does not rise during the fixed-interest period.
- In short: if the mortgage interest rate falls, you cannot benefit from this as easily. With a long fixed-interest period, it is expensive to take out your mortgage due to the high penalty interest.
It is therefore wise to first consult our interest rate forecast before you fix the mortgage interest.
2. How much certainty do I need?
- Long: By fixing your mortgage interest for a long time, you can be certain that your interest charges will remain the same during this period. If you borrow to the maximum or expect your income to remain the same in the coming years, this is a wise choice.
- Short: if you do not borrow as much as you like or if you pay off the mortgage during the term, you better opt for a short fixed-rate period. This is cheaper and a possible interest rate increase in the future can easily be absorbed.
3. How much do I want to borrow?
- Long: By fixing the mortgage interest rate for 10 years or longer, you can borrow more. From this fixed-interest period, the current interest may be used in the calculation of the maximum mortgage. The current interest rate is currently lower than the test interest rate.
- Short: if it is not necessary to borrow as much as possible, then it is no obstacle to opt for a short fixed-rate period. You are then cheaper.
What are my future plans?
- Long: a long fixed-interest period is of ideal course if you continue to live in the home for a long time. Do you have relocation plans and do you want to fix the mortgage interest for a long time? Then choose a mortgage with a relocation scheme included in the conditions. If you then move, you can transfer your current current mortgage (including interest).
- In short: if you are going to sell your property in the long term and rent another property, then it is of course not necessary to fix the mortgage interest for a long time. You then unnecessarily pay too much.