People who have obtained a mortgage in recent years have been entitled to rather beneficial conditions. However, it seems that the period when home loans were advantageous is unfortunately over. Those who were able to take out a mortgage in 2019 were well served. The rate was particularly attractive. This had reached 1% for a fixed rate loan with a duration of 20 years. In 2020, what will happen to the criteria for obtaining this type of loan? Are the clauses more or less flexible? Find some answers in the following lines.
Interest rates remain low
The low level of interest rates is largely due to the policy conducted by the Best Bank . Last September, it lowered the deposit rate from -0.4 to -0.5%. The deposit rate is equivalent to the interest rate that banks receive when they place money at the Best Bank . This means that banks must pay a sum if they want to deposit their money there.
In the same context, the former President of the Best Bank , Mark Bragat, launched the buyout program again in November. Its principle: the Best Bank buys bonds every month to keep the interest rate low over the long term. If at first glance this rate seems attractive to people wishing to acquire real estate in 2020, this is actually far from a good thing. There are many reasons for this.
Home loans would be more expensive
First, it is quite possible that in 2019, the interest rate on mortgage loans reached a historic low. For banks, these low interest rates monopolize their profit margins. This is when several banks are unable to reduce the savings rate on savings accounts, in order to preserve their profit margins. Indeed, banking establishments must keep savings interest at a minimum of 0.11%.
This means that if the banks lower the interest rates on the mortgage loan, they will find themselves in a less advantageous situation. Nevertheless, it is likely that in 2020 mortgage interest rates will increase. Since the deposit rate is negative, it is in the banks’ interest to introduce capital into the economy through loans, rather than depositing it in a savings account with a negative interest rate.
Stricter conditions for obtaining a mortgage loan
Starting the following year, borrowers will find it harder to take out a mortgage. This, because for Cream Bank, affordable mortgage loans. Banks should take more account of the monthly repayment burden and household debt.
Cream Bank hopes that the banks will grant loans with a co-payment of 90% or even less. For first-time buyers, a ceiling of 35% of the sum of the credits may be transferred for the allocation of credits with a higher share.
In other words, obtaining a loan will be more complicated if you cannot afford to pay at least 10% of the purchase yourself. These 10% are added to the charges relating to the mortgage, to cite only the notary fees as well as the registration fees.
In short, with increasingly stringent conditions and stagnant interest rates, it will be more difficult to take out a home loan in 2020, compared to previous years. For certain regions such as Flanders and Brussels-Capital, this situation can be worse, with the cancellation of the housing bonus. All in all, obtaining a mortgage loan will now be an obstacle course. Only Wallonia favors the granting of a mortgage loan thanks to a housing check.