Homeowners Face Higher Monthly Payments as Fixed-Rate Mortgages Expire
Many homeowners with mortgages from the past decade are beginning to see their monthly payments increase as their fixed-rate periods come to an end, following a series of interest rate hikes. Despite this, the impact is somewhat softened by larger mortgage interest deductions, according to De Hypotheker.
Rising Interest Rates and Their Effects
Between 2016 and 2021, interest rates reached historic lows. Since then, the average ten-year mortgage rate without the National Mortgage Guarantee (NHG) has climbed by more than three percentage points — from 1.05 to 4.07 percent.
De Hypotheker reports that about 16 percent of all mortgages during that low-rate period were taken with a fixed term of up to ten years.
Varying Impacts Across Homeowners
Those with partially interest-only mortgages are most affected by these changes. De Hypotheker’s case studies illustrate how these increases translate into real terms for households.
A couple who in 2016 took out a 450,000-euro mortgage at 2.4 percent for ten years, including 200,000 euros interest-only, would now pay an extra 206 euros per month at today’s average rate of 4.05 percent.
Thanks to the greater mortgage interest deductions, the rise in payments is limited; without this tax benefit, their monthly cost would have grown by roughly 430 euros.
Expert Assessment
“The impact of the higher interest rates on households seems generally manageable,” summarized De Hypotheker’s commercial director, Mark de Rijke.
Summary: Rising mortgage rates are pushing up monthly costs for many homeowners, but larger tax deductions have softened the blow, keeping the financial impact under control.