mortgage Rates in Belgium Could Rise Amidst Market Tensions
Brussels, Belgium – Belgian mortgage loan rates could see an increase of 0.20 to 0.50% if current market tensions persist,according to Bernard Keppenne,chief economist at CBC. โฃThe warning comes as fixed-rate 20-year mortgages have already risen from an average of 3%โ atโข the beginning of โthe year to 3.60% currently,a phenomenon Keppenne attributes to tightening bond markets.
“We are thus witnessing โขa phenomenon of penitification of the long-term rate curve whichโ is already theโ result of these bond tensions,” Keppenne explained.
While FranceS political situation is currently contained, preventing a wider “contagion effect,” sustained instability could impactโ Belgian borrowers.
The potential rate hikes โฃfollow a period of monetary relaxation by the European central Bank (ECB), which โฃlowered its deposit facility rate – the rate paid toโ banks for deposited liquidity – from 4%โค inโ June of last year to 2% currently, in response to easing inflation. Though, this easing hasn’t fully translated to lower rates for consumers.
The ECB is expected to pause further rate cuts โforโ “several months,” as โฃJuly’s inflation rate of 2.1% remains slightly above the bank’s target. โ Adding to the cautious outlook โขare โconcerns surrounding Belgium’s upcoming budgetary deadlines and increasing national debt.
