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Every (future) homebuyer, and most homeowners, are curious to know what level mortgage rates will be at in the future.
Actually, the answer to this question is that no one can say that with complete certainty, but of course a prediction can always be made based on currently available information and trends.
General information interest rates
On March 6, 2025, the ECB (European Central Bank) cut its official interest rates.
The deposit rate was lowered by 25 basis points to 2.5% for the sixth time in a row. Deposit rates have a lot of influence on interest rates in financial markets, such as mortgage rates.
Therefore, more interest rate cuts are expected to follow because the deposit rate is actually well above the neutral interest rate level. This is a notional, estimated interest rate level at which the ECB neither inhibits nor stimulates economic growth.
According to the estimate, the neutral interest rate is 1.5%. The difference between the deposit rate and the neutral rate suggests that the ECB is currently slowing economic activity.
Inflation has fallen markedly since peaking at 10.6% in October 2022, when the ECB quickly raised deposit rates to 4%. In February 2025, inflation stood at 2.4%, close to the ECB target level of 2%
Inflation is then expected to decline further. Indeed, consumer confidence and industrial indicators point to moderate economic growth.
If inflation indeed declines, the ECB may stick to its current course and continue to cut interest rates. In line with this, interest rates on short-term fixed-rate mortgages are also likely to fall.
Further interest rate cuts will also lead to a decline in long-term interest rates
Last May, 10-year interest rates on Dutch government bonds peaked at 3%, but then fell to 2.6%. In line with the 10-year rate on Dutch government bonds, rates on mortgages with longer fixed interest periods will also fall.
However, the decline is expected to be less than for government bonds. This is because the risks to lenders are increasing in an uncertain economic environment and the cost of this higher credit risk will be reflected in mortgage rates.
Forecast mortgage rates 2025, 2027 and 2030
Meanwhile, inflation in the euro zone has been brought down to 2.4%. However, that is still higher than the 2% the ECB is aiming for. The decline in inflation occurred particularly in 2023 and seems to stagnate in 2024.
The ECB still expects inflation to decline further in 2025 and 2026, eventually even falling slightly below 2%.
Therefore, interest rates in the financial markets, and subsequently mortgage rates, are expected to fall slightly in the coming years. We expect the popular 10-year fixed mortgage rate with NHG to be between 3 and 3.5% in 2025.
With stable economic development, these mortgage rates may even fall to just below 3% in the years 2027 through 2030.
But mortgage rates are not expected to return to levels between 1 and 2% any time soon. The ECB has learned from recent years that over stimulus through low or even negative interest rates combined with a bond-buying program does not contribute to financial stability in Europe.
It’s hard to base your choice of an interest rate fix on interest rate expectations
Those who need to lock in the interest rate for their mortgage for a certain period of time usually don’t have much use for an interest rate forecast at that time. As described, there are all sorts of unexpected events that make the future course of mortgage interest rates uncertain.
No one can predict with certainty the level of mortgage rates in 2025 – let alone 5, 10 or 20 years from now.
When choosing an interest rate fixed period, you need to weigh up whether you are going to fix your interest rate for longer with more security and an often higher interest rate or whether you are going for a low interest rate, shorter term and more risk. And it is good to ask yourself whether you can financially absorb any higher interest rates at the end of the fixed rate period?
Finally, you may find that interest rates are falling and you have fixed your interest rate for a long time. What will you do then? This is because you will pay a high penalty if you refinance your mortgage, unless you decide to move, but that too will incur additional costs.
How much mortgage interest will you get back in 2025?
Finally, in addition to interest rates, what is also important to know are mortgage interest deduction rates. In 2025, the maximum mortgage interest deduction is 37.48%.
In 2024, it was still 36.97%. Since 2014, the government has been phasing out the mortgage interest deduction. Starting in 2014, the deduction rate decreased 0.5% annually.
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