Utrecht, February 14, 2024 - The sudden rise in interest rates in mid-2022 was a shock to the mortgage market. Yet this did not turn out to be a real game changer. In fact, two years later, mortgage volume is almost back to the record levels of before that sudden rise. Individuals have become accustomed to higher mortgage rates and overall wage growth has rekindled the buying frenzy.
Mortgage volume back to record levels with fewer mortgages closed
The mortgage market has recovered at lightning speed after the mid-2022 shock. There were 23.3% more mortgages taken out in the fourth quarter of last year than the year before. This accounted for €42.7 billion in completed mortgages and is 16.4% more than in Q3 and 34.4% more than in the same period a year earlier.
In the past decade, there have only been two quarters (Q4 '21 and Q2 '22) in which total mortgage volume was higher than at the end of 2024. That rise is largely due to increased borrowing capacity. Buyers are borrowing more, resulting in a higher amount per mortgage. The number of mortgages closed (112,000) in Q4 2024 has not yet returned to the level of its peak in mid-2022 (136,000).
Total mortgage sales reach €139 billion in 2024. This is a 30% increase compared to 2023 and is illustrative of developments in the market.
First-time buyers lose potential relative to existing homeowners
The average mortgage loan size is still rising, but that is no longer true for first-time buyers. Their average mortgage remained the same in size (€390,000) as a quarter earlier. The mortgages of existing homeowners did increase. They borrowed on average 2.6% more than a quarter earlier and arrived at an average mortgage of €545,162. This is a record and indicates a slight decline in the position of first-time buyers compared to existing homeowners moving onto their next home.
Still, more first-time buyers managed to find their way into the housing market: 28,836 starter mortgages were taken out in Q4. This is 3,000 more than in Q3 and 5,200 more than in the same period last year. One explanation is that many private housing investors sold their investment homes in 2024 because of stricter rental rules. These are often homes in the lower price segment that are precisely of interest to first-time buyers.
Banks surrender market share
The banks' market share fell firmly last quarter from 59.4% to 55.7% of the mortgage market. The major banks Rabobank, ING and ABN AMRO dipped below 50% again with their combined market share at 47.9%. The regiepartijen (specially set up mortgage companies) also had to give up a slight share, shrinking from 17.2% to 16.6% market share. The share of insurers and foreign lenders on the Dutch mortgage market remained virtually stable. The gains are among non-traditional lenders: from 5.5% in Q3 to 9.6% in Q4. That category includes, for example, family mortgages, investment companies or stimulus funds.
The non-traditional lenders owe their rise mainly to lenders who are refinancing. Nearly a third (31.6%) of their mortgages were taken out there, up 12 percent from a quarter earlier. It is almost exclusively the banks that are ceding that market share to them. The banks’ share among those refinancing dropped from 49.8% to 39.2%.
Of the individual labels, ING and ABN AMRO lose the largest market share: 1 percent each compared to last quarter. The party with the largest gain is Munt Hypotheken (+0.1%). Rabobank subsidiary Vista and Lloyds Bank gained 0.7 and 0.6 percent, respectively.
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Authors & data analysis of the IG&H Mortgage Update:
Pim van Keeken
Annelies van Putten
Wouter Stomphorst