Regulatory Alerts2025-02-26
AFM Consumer Monitor: Mortgage Owners Q4 2024
The Dutch Authority for the Financial Markets (AFM) published its Q4 2024 Consumer Monitor on Mortgage Owners, analyzing the behavior, attitudes, and financial situations of Dutch households with mortgages based on survey data from October 2024. The report reveals that while interest-free mortgages remain most common among older borrowers, annuity mortgages are increasingly prevalent among younger demographics, with median outstanding debt stabilizing around €165,000. Furthermore, the study highlights that approximately 40% of homeowners have a loan-to-value ratio above 50%, with significant interest in utilizing home equity for renovations, energy efficiency improvements, or bridging pension gaps.
AFM Consumer Monitor Mortgage Owners – Q4 2024 Joost Leenen, MSc. 16 December 2024 dr. Millie Elsen
2 Introduction Background The AFM advocates for fair and transparent financial markets. As an independent conduct supervisor, the AFM contributes to sustainable financial well-being in the Netherlands. The Consumer Monitor provides insight into developments in consumer behavior over time. The monitor was launched in 2004 and has been conducted every half-year since then among various target groups. The primary objectives of the Consumer Monitor are: • describing the behavior and attitudes of financial consumers; • describing market and product aspects in the financial market. Guide This report contains the results of the Consumer Monitor conducted in October 2024 (Q4 2024) on the sub-topic "Mortgages." Fieldwork was conducted in the online LISS panel between 7 and 29 October 2024. The questionnaire was administered to a (random) sample of Dutch households with a mortgage. Within each household, the questionnaire was completed by the person most involved in the household's financial administration. The questionnaire covered various topics, including the choices made regarding mortgage type and interest rate fixation period, financial risks, and home sustainability. The differences between groups of mortgage owners (such as age groups) described in the commentary in this report are statistically significant (p < 0.05), unless stated otherwise. Table of Contents Mortgage Type 03 Mortgage Interest Rate 12 Extra Repayments 18 Interest-Only Mortgage 21 (Covering) Risks 27 Home Sustainability 35 Contact with Mortgage Advisor and Lender 40 Financial Situation 49 Research Methodology and Sample Description 54
3 Mortgage Type
4 For most mortgage owners, the mortgage consists of a maximum of two loan parts and a maximum of two mortgage types Basis (left) = all mortgage owners, n = 698 Basis (middle and right) = mortgage owners who know how many loan parts their mortgage consists of, 2022: n = 580, 2023: n = 613, 2024: n = 565 • Approximately two-thirds of mortgage owners state they took out their mortgage after 2010 (64%) and about one-third in or before 2010 (34%). • 8 out of 10 mortgage owners (80%) know how many loan parts their mortgage consists of (13% do not know and 7% prefer not to say). • For most mortgage owners, the mortgage consists of one (40%) or two (31%) loan parts. For slightly more than half, the mortgage consists of one mortgage type (56%). Part of the mortgage owners therefore have multiple loan parts with the same mortgage type (e.g., two annuity mortgage parts). Slightly more than 4 out of 10 mortgage owners have two or more mortgage types (43%). • In 2024, more mortgage owners state that their mortgage consists of three or more loan parts than in 2022 and 2023, causing the average number of loan parts (2.1) to increase slightly compared to 2022 and 2023 (1.9). Question (left): When did you take out your mortgage? Question (middle): How many loan parts does your mortgage consist of? Question (right): Indicate below for each loan part (1) what the mortgage type is and (2) what the outstanding debt (the amount still to be repaid) is. 4% 11% 19% 43% 21% 3% In 1990 or earlier Between 1991 and 2000 Between 2001 and 2010 Between 2011 and 2020 In 2021 or later I do not know (not even approximately) When did you take out your mortgage? 40% 31% 18% 8% 2% 2% 43% 34% 14% 7% 1% 1% 43% 37% 13% 5% 1% 0% 1 loan part 2 loan parts 3 loan parts 4 loan parts 5 loan parts 6 loan parts Number of loan parts 2024 (n = 565) 2023 (n = 613) 2022 (n = 580) 56% 39% 4% 0% 1% 57% 39% 3% 0% 1% 56% 38% 4% 0% 1% 1 mortgage type 2 mortgage types 3 mortgage types 4 mortgage types Unknown Number of mortgage types 2024 (n = 565) 2023 (n = 613) 2022 (n = 580)
5 39% 44% 6% 4% 3% 1% 1% 2% 0% 40% 42% 6% 6% 3% 0% 1% 2% 1% 43% 38% 5% 7% 3% 0% 1% 2% 1% Interest-Only Mortgage Annuity Mortgage Linear Mortgage Bank Savings Mortgage Life Mortgage with Savings Insurance (Savings Mortgage) Life Mortgage with Investment Insurance Investor Mortgage I do not know Prefer not to say % loan parts with a specific mortgage type 2024 (n = 1167) 2023 (n = 1153) 2022 (n = 1059) 63% 56% 10% 8% 6% 1% 2% 64% 52% 10% 10% 5% 0% 1% 66% 51% 7% 12% 6% 1% 2% Interest-Only Mortgage Annuity Mortgage Linear Mortgage Bank Savings Mortgage Life Mortgage with Savings Insurance (Savings Mortgage) Life Mortgage with Investment Insurance Investor Mortgage % mortgage owners with a specific mortgage type* 2024 (n = 565) 2023 (n = 613) 2022 (n = 580) The share with an (partially) annuity mortgage has increased Question: Indicate below for each loan part (1) what the mortgage type is and (2) what the outstanding debt (the amount still to be repaid) is. *These percentages do not add up to 100% because mortgage owners can have loan parts with different mortgage types. • The figure on the left shows what percentage of all mortgage owners has a specific mortgage type (i.e., at least one mortgage part with the relevant type, based on self-reports). The figure on the right shows what percentage of all loan parts (of all mortgage owners combined) has a specific mortgage type. • Most mortgage owners state they have an (partially) interest-only mortgage (figure left: 63%). However, of all loan parts, more are annuity (44%) than interest-only (39%; figure right). This means that interest-only mortgages more often form part of a mortgage consisting of multiple parts with different mortgage types. • The share with an annuity mortgage has increased since 2022. This increase is visible in both the share of mortgage owners with this mortgage type (left) and the share of all loan parts with this type (right). Since 2013, you can no longer take out a new bank savings mortgage – the share of mortgage owners with a bank savings mortgage is therefore decreasing (left). This also applies to the share of loan parts with this type (right). The other changes over time are not significant. Basis = mortgage owners who know how many loan parts their mortgage consists of, 2022: n = 580, 2023: n = 613, 2024: n = 565
6 An interest-only mortgage is the most common mortgage type among older mortgage owners; younger mortgage owners usually have an annuity mortgage Question: Indicate below for each loan part (1) what the mortgage type is and (2) what the outstanding debt (the amount still to be repaid) is. **These percentages do not add up to 100% because mortgage owners can have loan parts with different mortgage types. • Interest-only and annuity mortgages are the most common mortgage types. • The share with an (partially) interest-only mortgage rises strongly as age increases, from about 1 in 10 in the youngest age group to 9 in 10 in the oldest age group. • The share with an annuity mortgage (or annuity mortgage part) drops strongly as age increases, from almost 9 in 10 in the youngest age group to 2 in 10 in the oldest age group. Basis = mortgage owners who know how many loan parts their mortgage consists of, n = 565
- Note: the number of observations is low (n < 100). 10% 44% 68% 78% 91% 88% 78% 66% 42% 19% 14% 13% 13% 7% 3% 0% 9% 14% 11% 0% 2% 5% 12% 9% 0% 0% 0% 0% 0% 3% 2% 0% 2% 2% 4% 18-34 years (n = 77*) 35-44 years (n = 131) 45-54 years (n = 128) 55-64 years (n = 116) 65 years and older (n = 113) % mortgage owners with a specific mortgage type** Interest-Only Mortgage Annuity Mortgage Linear Mortgage Bank Savings Mortgage Life Mortgage with Savings Insurance (Savings Mortgage) Life Mortgage with Investment Insurance Investor Mortgage
7 The median outstanding mortgage debt per mortgage owner has not changed significantly since 2022 Question: Indicate below for each loan part (1) what the mortgage type is and (2) what the outstanding debt (the amount still to be repaid) is. • The median outstanding mortgage debt per mortgage owner is approximately €165,000 in 2024 (25th percentile: €98,000; 75th percentile: €254,000, based on self-reports). This amount has not changed significantly since 2022. • The median outstanding debt per age group decreases as age increases, from approximately €230,000 in the 18-34 age group to approximately €100,000 in the 65 years and older group. Basis = mortgage owners who know their total mortgage amount, 2022: n = 575, 2023: n = 617, 2024: n = 563
- Note: the number of observations is low (n < 100). € € 50000 € 100000 € 150000 € 200000 € 250000 € 300000 € 350000 2022 (n = 575) 2023 (n = 617) 2024 (n = 563) Total outstanding debt (p25, p50, p75) p25 p50 p75 € 159200 € 160566 € 165000 € € 50000 € 100000 € 150000 € 200000 € 250000 € 300000 € 350000 18-34 years (n = 77*) 35-44 years (n = 116) 45-54 years (n = 124) 55-64 years (n = 118) 65 years and older (n = 128) Total outstanding debt (p25, p50, p75) per age group p25 p50 p75 € 232000 € 220000 € 100500 € 192413 € 140000
8 The median outstanding debt of interest-only mortgage parts has decreased slightly since 2022 Question: Indicate below for each loan part (1) what the mortgage type is and (2) what the outstanding debt (the amount still to be repaid) is. • The 565 mortgage owners who know how many loan parts their mortgage consists of report a total of 1167 loan parts (average 2.1 loan parts per mortgage owner). • Interest-only and annuity mortgage types are the most common. For both mortgage types, the median debt per loan part is approximately €75,000 in 2024. • The median outstanding debt of interest-only mortgage parts has decreased slightly since 2022. Basis = all loan parts of mortgage owners who know how many loan parts their mortgage consists of, 2022: n = 1059, 2023: n = 1153, 2024: n = 1167
- Note: the number of observations is low (n < 100). € € 25000 € 50000 € 75000 € 100000 € 125000 € 150000 € 175000 € 200000 2022 (n = 501) 2023 (n = 528) 2024 (n = 444) 2022 (n = 367) 2023 (n = 428) 2024 (n = 519) Interest-Only Mortgage Annuity Mortgage Outstanding debt (p25, p50, p75) per mortgage type (per loan part) p25 p50 p75 € 84800 € 85000 € 74000 € 87000 € 75229 € 74000
9 Approximately 4 out of 10 mortgage owners have an LTV higher than 50% • For mortgage owners where both the outstanding debt and the WOZ value (official municipal property value) of the home are known, the loan-to-value (LTV) can be calculated. • 2 out of 100 mortgage owners state that their total outstanding debt is higher than the WOZ value of their home. This share has not changed compared to 2023. • In 2024, the median LTV, like in 2023, is estimated at 46%. *Mortgage owners where both the total outstanding debt and the WOZ value of the home are known (2024: 74% of the sample) Loan-to-value (LTV) = (outstanding debt / WOZ value of the home) * 100% Basis = mortgage owners where both the total outstanding debt and the WOZ value of the home are known, 2022: n = 527, 2023: n = 590 , 2024: n = 520 16% 19% 21% 27% 37% 37% 29% 29% 28% 21% 12% 12% 6% 2% 2% 2022 (n = 527) 2023 (n = 590) 2024 (n = 520) Loan-to-value (LTV) Higher than 100% 75% to 100% 50% to 75% 25% to 50% Lower than 25% LTV unknown: 26% 23% 26%
10 Mortgage owners with equity are most interested in a cash-out mortgage or additional mortgage part; 3 out of 10 find these options interesting Question: You have equity if the value of your home on the housing market is higher than the mortgage. Is your home worth €400,000 and the mortgage €350,000? Then you have €50,000 in equity. The equity of the home can optionally be used for (1) an additional mortgage part (e.g., an increase), (2) cash-out mortgage*, (3) sale-and-lease back**, if this fits within your financial situation. Indicate for each option whether you were already aware of it, whether it seems interesting to you, and whether you have used it. • Three-quarters of mortgage owners with an outstanding debt lower than 85% of the WOZ value of the home are aware of the possibility to use equity for an additional mortgage part (e.g., an increase; 77%). Slightly more than half are aware of the possibility to use equity for a cash-out mortgage (54%) and about 4 out of 10 are aware of "sale-and-lease back" (38%). • Approximately 3 out of 10 mortgage owners with equity find the possibility to use equity for a cash-out mortgage (29%) and/or for an additional mortgage part (29%) interesting. The possibility to use equity for "sale-and-lease back" is found interesting by about 1 in 7 mortgage owners with equity (14%). Basis = mortgage owners whose outstanding debt is lower than 85% of the WOZ value of the home, 2022: n = 599, 2023: n = 702, 2024: n = 645 16% 15% 18% 6% 7% 6% 54% 55% 49% 21% 18% 23% 4% 5% 5% 2022 (n = 599) 2023 (n = 702) 2024 (n = 645) ..an additional mortgage part 33% 29% 31% 19% 18% 14% 33% 35% 38% 14% 16% 15% 1% 1% 1% 2022 (n = 599) 2023 (n = 702) 2024 (n = 645) ...a cash-out mortgage* 56% 53% 52% 9% 10% 10% 29% 31% 34% 5% 5% 4% 0% 0% 0% 2022 (n = 599) 2023 (n = 702) 2024 (n = 645) ...sale-and-lease back** I have used the equity of my home in this way Heard of it and it sounds interesting Heard of it, but does not sound interesting Have not heard of it, but sounds interesting Have not heard of it and does not sound interesting
- With a cash-out mortgage, you receive (part of) the equity of your home in cash, while you continue to live in the home. This money is often used as a supplement to the pension. This is also called a cash-out mortgage. ** With 'sale-and-lease back', you sell your home and then rent it back. Awareness of and interest in using equity for...
11 Most mortgage owners would like to use equity for a renovation or the sustainability of the home • Of the mortgage owners who are interested in using their equity (for an additional mortgage part, cash-out mortgage and/or "sale-and-lease back"), almost half would like to use the equity for a renovation or adjustment of the home (48%). Of the mortgage owners who have actually used their equity, a large majority also used the equity for this purpose (71%, but note: the number of observations is low). • Approximately 4 out of 10 mortgage owners who are interested in using equity would like to use the equity for the sustainability of their home (39%). A quarter would like to use the equity to retire earlier (24%). Question: You state that you have used the equity of your home. What did you spend your equity on? / You state that the possibility to use your equity seems interesting to you. What would you like to use the equity for? Note: the number of observations is low (n < 100). Basis = mortgage owners whose outstanding debt is lower than 85% of the WOZ value of the home, who find the possibility to use their equity interesting (n = 275) or have used their equity in one of the three ways (see previous page) (n = 37) 71% 35% 9% 8% 4% 21% 0% 14% 48% 39% 12% 10% 7% 8% 24% 5% Renovating or adjusting the home Sustainability of my home Financially supporting my (grand)child(ren) A large purchase (such as a car) Extra spending room due to the consequences of increasing inflation Extra spending room for a reason other than inflation To be able to retire earlier Other What did you spend your equity on? / What would you like to use the equity for? Multiple answers possible Equity used (n = 37) Interest in using equity (n = 275)
12 Mortgage Interest Rate
13 Three-quarters of mortgage owners with a fixed rate state they pay an interest rate between 1.01% and 3.00% Question: Indicate below for each loan part (3) whether the interest rate is fixed or variable. Indicate for each loan part with a fixed interest rate (4) what the interest rate fixation period is, (5) what the interest percentage is and (6) when it expires. Note: The percentages in the figures do not add up to 100% because mortgage owners can have loan parts with different interest rate forms and interest percentages. Basis (left) = mortgage owners who know how many loan parts their mortgage consists of, n = 565. Basis (right) = mortgage owners with a mortgage(part) with a fixed interest rate: n = 537 • 95% of mortgage owners state they have (at least) a mortgage(part) with a fixed interest rate and 5% (at least) a mortgage(part) with a variable interest rate. • Of the mortgage owners with a fixed interest rate, about three-quarters state that the mortgage interest rate is between 1.01% and 3.00% (for at least one mortgage part). Almost a third state they pay between 3.01% and 5.00% mortgage interest (for at least one mortgage part). 95% 5% 3% 1% Fixed interest rate Variable interest rate I do not know Prefer not to say % mortgage owners with a mortgage(part) with... 3% 45% 37% 18% 15% 4% 0% 1.00% or lower 1.01% - 2.00% 2.01% - 3.00% 3.01% - 4.00% 4.01% - 5.00% 5.01% - 6.00% 6.01% or higher % mortgage owners with a mortgage(part) with interest percentage of...
14 1 in 12 mortgage owners has a fixed interest rate period expiring within 1 year or less Question: Indicate for each loan part with a fixed interest rate (4) what the interest rate fixation period is, (5) what the interest percentage is and (6) when it expires. Note: The percentages in the figures do not add up to 100% because mortgage owners can have loan parts with different interest rate fixation periods. Basis = mortgage owners with a mortgage(part) with a fixed interest rate: n = 537 • Most mortgage owners with a mortgage(part) with a fixed interest rate state they have an interest rate fixation period of 6-10 years (41%) and/or 16-20 years (37%). 1 in 5 mortgage owners states they have a mortgage(part) with an interest rate fixation period of more than 20 years (20%). • Of the mortgage owners with a mortgage(part) with a fixed interest rate, about one-fifth states that the interest rate fixation period (of at least one of the mortgage parts) expires within three years (22%). 8% 14% 45% 47% 3% 1 year or less 2-3 years 4-10 years more than 10 years I do not know/prefer not to say % mortgage owners with a mortgage(part) with an interest rate fixation period expiring within... 7% 41% 10% 37% 20% 3% 0% 1-5 years 6-10 years 11-15 years 16-20 years 21-30 years I do not know Prefer not to say % mortgage owners with a mortgage(part) with an interest rate fixation period of...
15 Slightly more than 1 in 10 mortgage owners with a fixed interest rate has early refinanced the mortgage OR considered doing so Question (left): When did you last make a choice regarding the interest rate fixation period of your mortgage? Question (middle): Have you early refinanced your mortgage in the past two years?* Question (right): Have you considered early refinancing your mortgage in the past two years?** Basis = mortgage owners with a mortgage(part) with a fixed interest rate, 2023: n = 583, 2024: n = 537 (figures left and middle), who have not early refinanced their mortgage in the past two years, 2023: n = 508, 2024: n = 493 (figure right) • 6 out of 10 mortgage owners with a mortgage(part) with a fixed interest rate state they have made a choice regarding the interest rate fixation period of their mortgage in the past five years (61%). About 2 in 10 say they did this in the past 2 years (19%). • About 1 in 14 mortgage owners with a mortgage(part) with a fixed interest rate states they early refinanced the mortgage in the past two years (7%). This share has decreased slightly compared to 2023. Of the mortgage owners who have not early refinanced their mortgage, about 1 in 17 states they have considered doing so (6%). This share has not changed significantly compared to 2023. • In total, about one-tenth of all mortgage owners with a mortgage(part) with a fixed interest rate has at least considered refinancing the mortgage before the expiration of the interest rate fixation period (12%). 5% 6% 8% 42% 28% 8% 3% Less than 6 months ago 6 to 12 months ago 1 to 2 years ago 2 to 5 years ago 5 to 10 years ago 10 years or longer ago I do not know (anymore) When did you last make a choice regarding the interest rate fixation period of your mortgage? 12% 7% 87% 91% 1% 2% 2023 (n = 583) 2024 (n = 537) Have you early refinanced your mortgage in the past two years?* Yes No I do not know (anymore) 9% 6% 90% 94% 1% 0% 2023 (n = 508) 2024 (n = 493) Have you considered early refinancing your mortgage before the expiration of your interest rate fixation period?** Yes No I do not know (anymore)
- That is, you have changed the existing interest rate contract to a different interest rate before the expiration of your normal interest rate fixation period. ** That is, you considered changing the existing interest rate contract to a different interest rate before the expiration of your normal interest rate fixation period.