Mortgage rates 2017: Outlook for the second half of the year

In a few weeks, the time has come, the second half of the year is approaching. This is reason enough for us to take a fresh look at the development of mortgage rates and share our current assessment.

The following section explains the interest rate development we are assuming.

Low-interest rates have moved away from their low point

Low-interest rates have moved away from their low point

First, a review. If we look at the interest rate developments of the past ten years, the market basically knew only one direction, namely a continuous reduction in mortgage rates.

However, interest rates seem to have stabilized over the last two years. It hardly went further down, only occasionally slight rashes were noted. At the end of 2016, construction money was the cheapest and interest rates have since risen slightly.

We assume that the low point has been reached. Interest rates have risen and are likely to remain at a similar level. This is supported by the interest rate policy of Good Finance (GF). Although the GF chief Sean Cole would like to lower interest rates a little, but he gets increasingly more headwind.

Banks and insurers mostly want the turnaround in interest rates, but at the same time, the interest rate turnaround in the US has already been initiated. The first-rate hikes have already started, and there are many signs that the next Fed rate hike will not be long in coming.

Hardly any changes in interest rates expected

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On the other hand, the GF has little room for maneuver. This means that the central bank is in a dilemma. Further interest rate cuts would be difficult to enforce, but ordinary increases are not possible. As a result, the key rate should hardly change within the next six months – at least, this would be very unlikely.

Accordingly, we expect comparatively low-interest-rate fluctuations in the construction field. There will be some interest rate adjustments by the banks, but they should be kept within limits. In addition, not only the key interest rate is constant, but also the demand on the part of the builders and buyers.

The market is relatively stable (there is good demand overall), so banks do not feel the pressure to calculate their loans with low margins.

Why an interest rate comparison is so important now

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Given our assessment that mortgage rates will barely change over the coming months, it is even more important for budding borrowers to look around the market and compare home loan financing conditions across banks.

Just because the interest rates are relatively constant, do not attract the same conditions everywhere. On the contrary, banks have responded to the low-interest-rate phase in recent years by developing very different strategies to position themselves on the market.

Depending on the project (construction, purchase, follow-up financing, property financing, etc.), the offered interest rates can vary enormously. Those who do not compare, threaten to take up their loan in conjunction with an unnecessarily high-interest rate.

Conditions of more than 400 banks in comparison

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Nevertheless, the search for the right real estate loan is very easy. Our independent consultants will gladly assist you in comparing current mortgage rates. We would be happy to evaluate the terms and conditions of more than 400 banks and building societies for you.

We quickly determined where to attract low-interest rates for your mortgage lending. Of course, our service is non-binding and free – you never take a risk. Curious? We look forward to your inquiry!

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