Interest is currently very low, which seems to be beneficial for mortgage holders. About 50% of all homebuyers now take out 20 to 30 year mortgages with fixed, low interest. However, they are most likely to be disappointed if they move and want to switch their mortgage to their new property.
Moving to another house
Generally people move every seven years. However, many banks and mortgage providers say in the contracts’ small print that the guaranteed low interestwill change if the buyer moves to a new home. Examples are ING, Hypotrust and Bijbouw. They don’t allow people to transfer existing mortgages to a new home if it is more expensive than the national mortgage guarantee (nationale hypotheekgarantie, NHG), currently €247,450. The NHG is especially interesting for first-time buyers who want to ensure they have a mortgage they can afford and have a safety-net in case personal circumstances change and they can’t afford the mortgage any more.
According to homeowners’ interest group Vereniging Eigen Huis (VEH), banks are misleading their clients by not making these conditions more explicit. If somebody moves, he has to pay the current interest rate, which might be higher. If he had known that, he might have chosen for a shorter fixed interest period with an interest that would have been even lower. This can cause problems, especially for homeowners with a NHG mortgage.
VEH wants all mortgage providers to change their conditions regarding moving. In addition, VEH wants providers to offer those not knowing the conditions regarding a move the opportunity to change to another mortgage or another fixed time.