First-time buyers spend a third of their disposable income on a mortgage

- Advertisement -spot_imgspot_img
First-time buyers spend a third of their disposable income on a mortgage

First-time buyers are having an increasingly difficult time in the housing market. Due to the rapid rise in mortgage interest, they have lost an average of one third of their disposable income on their mortgage payments. Never before has that share been so high. Housing market economist Mirjam Bani of ING also sees this.

Due to the rapid rise in mortgage interest rates, first-time buyers spend on average one-third of their disposable income on their mortgage payments. Never before has that share been so high ( ANP/ Hollandse Hoogte / Berlinda van Dam)

She states that the increase in that share is largely due to the rise in mortgage interest rates, although she emphasizes that other factors also play a role. House prices, for example, rose sharply in the first half of last year. “As a result, the mortgage interest rate has risen from 27 percent in 2021 to 33 percent in 2022,” says Bani. “That’s a big increase.”

The reason that specifically starters seem to be the victims of the high mortgage interest is because they can get much lower mortgages. For example, people moving on are much more likely to be able to take their old mortgage contract with them when they buy a new home. ‘So if the interest rate on their old contract is low, they will feel the currently high interest rates less hard in their wallets.’

Slight improvement ahead

According to Bani, it’s not all doom and gloom. For example, improvement is on the horizon, because not only house prices are falling. The income of starters will also increase on average, she expects. ‘That means that they can bear mortgage costs more easily.’

‘It’s getting a little better’

Mirjam Bani, ING

Before the end of 2023, ING assumes that the mortgage interest rate will fall again to 29 percent, so the worst seems to be over for first-time buyers. However, she does not want to downplay the level of mortgage interest: ’29 percent is still above average,’ she concludes. ‘Especially if you compare it with a longer period. But it gets a little better when you look at affordability.’


- Advertisement -spot_imgspot_img
Latest news
- Advertisement -spot_img
Related news
- Advertisement -spot_img