According to ING, newcomers to the owner-occupied housing market late last year were paying a very high percentage of their income on mortgages. Although real estate prices fell, mortgage rates rose sharply at the same time.
If first-time buyers bought an average home, they would spend almost a third (32.9 percent) of their income on mortgages. A year ago this was 27 percent of their income. This rate will drop again this year due to increased income and the expected drop in housing prices. ING expects first-time buyers to spend about 29 percent of their income on mortgages by the end of this year.
ING calculated this using the mortgage cost of an average home. In practice, beginners will often buy a cheaper home. Then the costs are also slightly lower. Just last month, valuation firm Calcasa stated that there are few options for first-time buyers in the housing market. The average single person can only finance 3.4 percent of homes.
Transfer recipients benefit from the takeaway rule
People who already own their own home and are buying a new home are generally much less affected by the increase in mortgage interest rates. Because of the so-called rebooking arrangement, you can “take” your old, lower mortgage rates with you on the mortgage for your new home.
ING estimates that a first-time homebuyer will spend a net €1,550 per month on an average home with a mortgage rate of 4.8 percent. He spends 1,290 euros on the same house from an old-rate roll from 2017 (2.3 percent). 1230 euro for a transfer with interest (1.54 percent) from 2021.
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
