Mortgages are becoming smaller and the size of loans agreed in the final three months of this year is down 11% on the same period in 2021, according to statistics from mortgage advisory group De Hypotheker.

At the same time, average mortgage has fallen below €300,000 for the first time in two years.

The figures are the latest to indicate that people are not only borrowing less money because of rising interest rates, but that house prices may also be coming down.

In January 2022, the 10-year fixed interest rate on a property with a national mortgage guarantee was around 1.1%, but this had gone up to 4.3% by the start of the fourth quarter, De Hypotheker said.

House prices are also going down, and the Dutch central bank predicts they will have shrunk 6.4% by the end of 2024.

Turning point

‘Since the turning point in the second quarter, we have seen a sharp drop in the average amount borrowed, but that may well flatten in the first quarter of 2023 because interest rates have gone down a little in the past few weeks,’ said commercial director Menno Luiten.

Young buyers are also getting a ‘foot in the door’ again because more homes are coming on the market and there is less competition to buy, he said.

Zeeland is the only one of the 12 Dutch provinces where the size of mortgages have gone up in the last quarter, compared with a year ago. The biggest declines are in Noord-Holland, home to Amsterdam, and Zuid-Holland, where loans have gone down by 14% and 13% respectively.