Is your fixed-rate period ending before the end of 2028? How to limit the rise in your monthly costs

Almost a million homeowners in the Netherlands will pay more for their mortgage in the coming years. That is the finding of a new analysis by De Nederlandsche Bank (DNB), the Dutch central bank. Their fixed-rate period ends before the end of 2028, or they have a variable rate. For the typical household, gross monthly costs rise by about €150 a month.

Are you one of them? Then you don’t have to wait and see. In this blog we explain what happens when your rate ends and what you can do now.

1. Why are monthly costs rising?

Many people took out their mortgage when rates were very low. Five years ago the average rate on a new mortgage was around 1.6%. Today it is about 4%. When your fixed-rate period ends, you get a new rate in line with today’s rates. In almost all cases, that rate is higher.

The differences between households are large. For a quarter the increase is less than €50 a month, for another quarter more than €300. That depends on your old rate, the size of your debt and the rate in your new offer.

2. Example

Say you still have a €250,000 mortgage with 20 years to go.

In this example you’ll pay almost €275 a month more. A rate that is 0.25% lower saves just over €30 a month. Over ten years that adds up to almost €4,000.

3. Five things you can do now

1. Check when your rate ends. You’ll find this in your mortgage deed or in your bank’s online portal. Your bank usually sends a new rate offer a few months in advance. Don’t wait for it: the sooner you know your options, the more room you have.
2. Check whether you qualify for a lower risk class. Your rate also depends on your debt compared with the value of your home (loan-to-value). Homes have risen sharply in value in recent years, so your mortgage may now fall into a better class. At many banks you have to request this yourself, for example with a new valuation or your WOZ value.
3. Compare your bank’s offer with the market. At the end of your fixed-rate period you can remortgage with another lender without a penalty. You will pay costs, such as a new valuation and the notary. So work out whether the difference in rate is worth those costs.
4. Make an extra repayment if you can. Have savings to spare? Most mortgages let you repay part of the loan penalty-free each year. A lower debt means lower monthly costs and sometimes a lower risk class. Read more about paying off your mortgage.
5. Choose your new fixed-rate period carefully. A shorter period sometimes has a lower rate, but you face the same risk again sooner. Since 2022 many people have chosen five to ten years. Choose what fits your plans: will you stay in this home for a long time, or do you expect to move?

4. What are rates doing now?

Mortgage rates have dropped slightly in recent weeks. That’s good news if your rate ends soon, but the gap with the low rates of a few years ago is still large. Nobody knows exactly where rates will go. If you want certainty, some banks let you lock in your new rate in advance, sometimes for a small surcharge.

What does this mean for you?

• Is your rate ending before the end of 2028? Check now exactly when, and what rate you currently pay.
• Has your home gone up a lot in value? Ask your bank whether you qualify for a lower risk class.
• Received a rate offer from your bank? Don’t accept it without comparing it with the market.
• Want a quick idea of what you could save? Our mortgage savings check gives you a first indication.

The amounts in this blog are examples. Your new rate and monthly payment depend on your own situation and your lender.

Is your rate ending soon? At Advies van Jord we’re happy to work out the best next step with you. Book a free introductory meeting: online, at our office or at your home in the Rotterdam and Utrecht area.