Interest on home loans is historically low


With an average of 2.63 percent, the rates for mortgage loans are currently the lowest since there is a structured comparison. Never before in Belgium could such a cheap rate be borrowed for the construction or purchase of a home. The attractive low interest rate also opens up a lot of possibilities for refinancing existing home loans.

The historically low percentage was registered on 1 February 2016. It is the average of the ten most advantageous rates offered on a fixed-rate mortgage with a term of 20 years (one of the most popular formulas). Among the weighted offers were only rates from major market players. The upcoming BATIBOUW (25 February to 6 March 2016) will undoubtedly influence the decrease in the price for home loans during this period of the year. But even more, the super-low average of 2.63 percent is a clear sign that the downward trend in the price for home loans is still ongoing. On 1 February 2015, a market average of 3.4 percent applied for the same type of loan, and on 1 February 2014 it was 4.5 percent. Although analysts believe that thelowest point has really been reached, they can again be wrong. After all, an average percentage of 2.63 percent means that a number of banks offer their product cheaper. For example, Cream Bank is currently only charging 2.25 percent interest on a 20-year profit loan. 


Refinance and buy a second home

home loan

At times when the interest rate on housing loans is low, there is usually a huge run to the banks. In addition to new builders and buyers, who want to take out a mortgage loan for the first time, many borrowers are also trying to refinance their existing credit at the cheapest rate. On a loan of 200,000 dollars, a 2 percent interest rate reduction ensures that the annual credit costs decrease by around 2,200 dollars. Calculated over a 20-year period, this results in a saving of 44,000 dollars.


The low housing interest

home loan

It also seems to encourage Belgians to take out a loan for the purchase of a second home. Market leader Highest Bank concluded 1 in 10 home loans in 2015 to purchase a second home or apartment. An increase of 20% compared to the year before. With the current historically low percentage, this trend is very likely to continue in 2016.