Homeowners facing mortgage interest rate renewals are seeing increases, contrasting with the decline in savings rates, creating financial challenges.

The disparity arises from the distinct nature of these interest rates. Savings accounts offer immediate withdrawal options, and banks receive a 2 percent interest rate from the European Central Bank for these funds, a decrease from the previous year’s higher rate. Mortgage rates, however, are tied to long-term investments, often spanning 30 years with fixed interest rates.

Banks assess mortgage interest rates based on factors like the 10-year government bond interest rate, which has seen a slight increase this year, currently around 2.8 percent.

For a 10-year fixed mortgage, homeowners can expect to pay approximately 3.9 percent interest, varying by bank and mortgage size.

Many homeowners favored 10-year fixed mortgages for their balance of security and flexibility.

Those who secured these rates from 2015 onward, when rates dipped below 3 percent and even 2 percent from 2016, now face significantly higher renewal rates, potentially increasing their annual expenses by thousands of euros.

The Tax Authorities (Belastingdienst) may offer some relief through interest deductibility, typically at 37.5 percent, though this percentage is lower for state pensioners and incomes up to 38,400 euros. Homeowners can request a preliminary assessment for 2025 to receive these deductions sooner.

Exploring options like a 5-year fixed mortgage, which may offer lower interest rates, or switching lenders during the three-month renewal window, can be beneficial.

Switching involves costs for mortgage advice, notary services, and valuation, all of which are deductible. This option is most viable for mortgages of at least 150,000 euros or for those planning to increase their mortgage for renovations.

Consulting a mortgage broker for a free orientation meeting is advisable to gain insights into costs and compare options from multiple providers, allowing for comprehensive financial planning that includes energy-saving measures and pension considerations.