How does the interest rate develop in July? Read our mortgage interest expectation. This month we see the market interest rate rise again. How do the banks respond?
Increasing trend interrupted
In June, the rising trend in mortgage rates was interrupted again. After disappointing inflation figures, investors’ confidence in economic growth turned out to be less than expected.
The capital market interest rate, an important indicator of mortgage interest rates, fell slightly in this period. This was a reason for the banks to just be on the spot with interest rate increases. A number of lenders took this space to adjust their rates downwards.
- Price fighters, such as Merius, Hypotrust and MoneYou in particular adjust their rates quickly to changing market conditions.
Spring market interest rates
At the end of June, market interest rates suddenly increased. The reason was statements about the interest rate policy, both in the US and in Europe:
- In the US, the Fed raised the policy rate for the second time this year. In addition, chairman Yellen suggested to sell previously purchased debt paper.
- In Europe, an increase in the policy rate is still far away. ECB chairman Draghi did, for the first time, speak out about phasing out the buy-in policy.
Draghi’s statements were immediately nuanced when the market reacted very fiercely and market interest rates soared. This shows yet again the desire of the central bank for a gradual interest rate development.
Banks adjust rates quickly
The same lenders, who lowered their rates in June, are now raising their mortgage rates again. There is a strong desire to offer the lowest mortgage interest. Now that housing market is running at full speed, considerable market share can be gained.
At the same time, the margins of banks are under pressure. This means that banks have to lower their rates quickly with rising market interest rates.
Mortgage interest expectation in July
This provides a highly variable picture for mortgage interest. On balance, we expect the mortgage interest rate to remain at its current low level in July and possibly rise slightly again.
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