Mortgage rates have risen sharply in recent months. For a 25-year fixed-rate loan, the average rate offered is more than 2%, the highest level for three years, according to the Immotheker-Finotheker barometer, which compares the rates of regarding ten banks in Belgium. For a loan over 20 years, the interest rate is on average 1.95%. It is also the highest threshold since 2018. Until a month ago, the average rate was still 1.40%.
“All prices increase“, comments John Romain, of Immotheker-Finotheker. The latter points as an explanation for the rise in long-term interest rates in Belgium. “The 20-year OLO (linear obligation, editor’s note) doubled compared to the start of the year, to 1.38%.The 10-year rate also rose to 1% on Tuesday, the highest since 2018.
Higher interest also means more repayments for the same amount of credit. “If you borrow 200,000 euros today, you will repay an average of 1,005 euros per month“, illustrates Immotheker.”With an interest rate of 1.40%, it would be 955 euros, or 50 euros less.“Over the entire term of the loan, this represents a difference of 12,000 euros in terms of interest payments.
The customer can still avoid this increase by opting for a variable rate. “Short-term interest rates have not risen as much“, specifies John Romain.
