Households repay loans

Interest rates are falling – but not borrowing rates

Households handled their money wisely in the first quarter of 2019. Savings balances have increased – despite the extremely low savings interest rates – and consumer loans have also been repaid. This is evident from figures published by Statistics Netherlands.

Interest rates are falling - but not borrowing rates


Lower debts


Statistics from Statistics Netherlands show that household debt decreased in the past quarter for the first time since 2016. This specifically concerns consumer loans and other long-term loans.

If we look at mortgages, it appears that the amount of residential mortgages has increased in the past quarter. But less quickly than in recent quarters.

Lower interest rates, higher loan interest rates

Interest rates have been falling sharply lately. The graph below shows the development of the capital market interest rate (10-year government loan), the savings interest (highest interest savings accounts without conditions) and the mortgage interest rate (lowest interest 10-year annuities with National Mortgage Guarantee) in the last year.

It is clear that all interest rates – especially in recent months – have declined. Unfortunately, this does not apply to borrow rates. The graph below shows the lowest borrowing rates in the last 10 years (lowest revolving interest rate and personal loan). It is striking that the interest on the personal loan has remained the same in the last year and that the interest on the revolving credit has even increased.

If we look a little further at the development of borrowing rates, we see that most lenders have recently been raising interest rates. So completely against the general interest rate trend. The question is whether people who want to apply for a loan will also benefit from the general fall in interest rates that we have seen in the near future.

Many loans can be cheaper

Many loans can be cheaper

That does not mean that it is not interesting to see whether you can save on your loan. The vast majority of the loans still run at interest rates that are much higher than the minimum interest rate that is currently possible in the market. We, therefore, advise you to take your own loan (s) and see which interest rates are currently possible. Who knows, you can realize a nice saving!

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