How does the mortgage interest rate develop in June? You can read it in our mortgage interest expectation. The market interest rate will fall sharply this month. How do the banks respond?
Finally clarity …
Import duties or not? The financial markets have been awaiting the final decision of US President Trump in recent months. Today it has become clear that the import levies for steel and aluminum will also apply to the European Union.
But also new uncertainty
The EU cuts back immediately by charging the same rates for American steel and aluminum. In addition, there are new rates for typical American products such as jeans and Harley Davidson engines. How is the US going to respond to this? Such a trade war with reciprocal restrictive measures is exactly what investors fear.
In addition, it seemed for a long time that the formation of a new government in Italy would fail. Possible new elections in September can turn into a vote for or against the Euro. This also caused unrest on the financial markets last week and the stock markets fell short.
Mortgage interest rate forecast for June
Because of this uncertainty, investors ‘flee to safe harbors’, including Germany and the Netherlands. A larger offer on these capital markets means that the interest rates for government bonds fall. The figure below shows that the interest rate for the 10-year Dutch government loan is back at January level.
This capital market interest rate is an important indicator of long-term mortgage interest, including the popular 20-year fixed-rate mortgage. We therefore expect that mortgage rates will fall slightly in June.
Short-term interest rate decrease
This fall in interest rates may just be short-lived. The Eurotick Bank will meet on 14 June to discuss whether or not to continue the buy-back program after September 2018. With inflation rising in the Eurozone, more and more voices are calling to stop this stimulus of the economy. This will eventually lead to a higher mortgage interest rate.
A new price war on the mortgage market?
These changing market conditions are also expected to shake up the mortgage market. Which lenders adjust their mortgage rates and what will their new position be? In addition, competition on the mortgage market has increased.
In the battle for the mortgage customer, not only does the mortgage interest rate fall, but more people are also eligible for a mortgage. The coming months will be crucial for the mortgage interest in 2018.