Banks raise interest rates substantially

In recent weeks, various lenders in the Netherlands have quietly increased interest rates, including Rabobank, which provides the most loans. And if the market leader increases, the other banks will also follow, or at least that is a logical thought. Advisory group Van de Bruggen indicates that banks are eager to increase interest rates to counteract the pressure on margins.

Because the interest rate market is highly competitive, many banks did not dare to do this until recently. Now things seem to have changed and interest rate increases of up to 0,15% have been implemented, which is significant according to the Advisory Group. You can now borrow money from Rabobank at 1,62% for a fixed interest period of 25 years.

Capital interest increases
The rising interest is the result of rising capital interest rates, at which banks can lend money themselves. Mortgages with a long fixed interest rate period in particular usually fluctuate with the movements in the capital interest market.

Capital market interest rates have been rising since mid-August, after a dip in June and July. Rising inflation, among other things, is driving interest rates up. The 10-year interest rate in Germany is still negative, but less negative than it was. The expectation is that the increase will continue in the short term. 

No big increases 
Although interest rates are now recovering somewhat, major increases are not in the offing. The European Central Bank (ECB) wants to leave interest rates in the Eurozone unchanged for the time being, but did reveal at its meeting in September that monetary policy will become less loose. For example, bond buying will be phased out.

Klaas Knot, president of the Dutch Bank, no longer foresees extremely high interest rates in the longer term. He expects that interest rates will not exceed 4% in the future. However, he also expects slowly rising interest rates in the near future.