Ten-year mortgage interest is on average 1.06 percent, according to figures from financial advisor De Hypotheker.
At large bank ABN AMRO, it even reaches 1.01 percent, according to a tour of NU.nl.
The buy-back program of the European Central Bank (ECB) and the corona crisis are at the basis of this.
What is going on?
The number of refinances, or people refinancing their mortgage with another bank, has risen sharply in the past year.
That is what ING economist Mirjam Bani told NU.nl.
“Mortgage interest rates were expected to rise, leading many people to quickly recalculate their mortgages,” she says.
But now it appears that it could be even lower.
NU.nl made a tour of the major Dutch banks.
At present, the ten-year interest rate at ABN AMRO is at a historic low of 1.01 percent, with Rabobank at 1.08 percent, the lowest level in twenty years.
ING requires 1.21 percent, the lowest level in at least seven years.
According to independent advisor De Hypotheker, you pay an average of 1.06 percent when paying off a mortgage.
There are several reasons for this.
The government support resulting from the corona crisis plays a role, as people can then save more money to buy a house, but it is mainly the policy of the ECB that is important.
It has been buying bonds from companies and governments since 2015 so that that money ends up in the economy.
As a result, people have more money to borrow, which pushes interest rates down.
And that lower interest rate then again encourages people to borrow money, which again lowers the interest.
The ECB has already announced that it will continue with the buy-back program at least until June 2022.
A third reason is the strong competition in the housing market.
"There are many mortgage loan providers out there and that puts downward pressure on interest rates," says Bani.
What does this mean for house prices?
The lower the mortgage interest rates, the higher the house prices and vice versa.
"After all, it becomes relatively cheaper to take out a mortgage and thus buy a house when interest rates are lower, making people willing to pay more for a house."
Could it be any lower?
"It is difficult to predict, but in our baseline scenario for the housing market we assume a slight increase," says Bani.
Although she emphasizes that the uncertainties are very great.
This expected upward pressure is due to the fact that governments are now borrowing a lot of money from the capital markets to tackle the corona pandemic.
"Because of this high demand for money, the capital market interest rate is rising and that is also pushing the other interest rates upwards. And when the economy eventually recovers, interest rates will also rise."
De Hypotheker confirms this picture and adds that investors are already looking forward to an economic recovery, which will cause the share prices of banks to rise.
"Furthermore, investors charge lower risk premiums to banks if they entrust them with money. This allows banks to finance themselves more cheaply and customers benefit in the form of lower mortgage rates," the organization says.