How does the mortgage interest rate develop in 2018? We give our expectations for interest based on developments in the market. Will the mortgage interest rate rise in 2018?
Mortgage interest rate expectation 2018
The mortgage interest rate fell slightly last year. This seems to have reached the bottom of the interest. This year, the European Central Bank started to phase out the stimulus measures that are now causing low mortgage rates. The central bank opts for the cautious approach, which means that mortgage interest rates will rise slightly in 2018 years.
Mortgage interest rate bottom reached?
Mortgage interest has broken several low records in recent years. Last year was a changing year in terms of interest rates. For example, interest rates rose unexpectedly at the beginning of last year and by the end of 2017, interest rates dropped back to the historically low interest rate level at the end of 2016.
On balance, the average mortgage interest rate fell by a few tenths of a percent last year. After the sharp decline in recent years, it appears that the bottom of the mortgage interest has now reached. This is the moment for many homeowners to take out the mortgage. How does the mortgage interest rate develop in 2018?
Why is the mortgage interest rate low?
To answer this question, we first look at the cause of this historically low mortgage interest rate. We largely ‘owe’ this to the euro crisis, resulting in low economic growth. The European Central Bank (ECB) has for some time been taking measures to boost spending in the Eurozone.
The ECB has two important instruments for this. It keeps its policy interest rates low while at the same time buying out billions of euros in loans every month. This should make mortgages and consumer money borrowing attractive. The savings rate is kept low to make saving unattractive.
Incentive measures phased out in 2018
The economy in the Eurozone is now growing steadily. Account is taken of 2.3% economic growth in the Eurozone for 2018. This expected growth rate has already been adjusted upwards a number of times. This is partly the reason for the ECB to gradually phase out the stimulus measures. The central bank has halved the buy-back program from 60 billion to 30 billion since 2018. The policy rates remain the same for the time being.