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Increased transparency for variable interest rates

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The Ministry of Finance is to introduce further regulations in order to encourage transparency with regard to variable interest rates. A study by the Netherlands Authority for the Financial Markets [Autoriteit Financiële Markten, or AFM] shows that consumers are not properly informed regarding the way in which their variable mortgage interest rates are set. The Ministry and the supervisor want consumers to be better informed when they conclude a mortgage.

The study of the information provided with regard to variable interest-rate mortgages was initiated by the AFM in response to various complaints from consumers. The study included a total of eleven variable-interest mortgage products from eight providers (banks and insurers).

The Dutch Financial Supervision Act [Wet op het financieel toezicht, or Wft] states that before concluding a credit agreement consumers must be provided with all relevant information to enable them to make a proper assessment and consideration. The AFM’s study reveals that the information provided by the providers is inadequate because no information is given on the calculation and setting of the interest rate and the associated risks of a variable interest rate for consumers. The AFM advises consumers to ask for this information if it is not available, and to review it carefully.

The Ministry’s intention is to have started the consultation phase for an order in council by the end of the summer, in order to ensure that all mortgage providers observe the requirements of the Wft in a similar way and that consumers are better informed regarding the setting of variable interest rates and the associated risks.

The AFM promotes honesty and transparency within financial markets. We are the independent supervisory authority for the savings, lending, investment and insurance markets. The AFM promotes the conscientious provision of financial services to consumers and supervises the honest and efficient operation of the capital markets. Our aim is to improve consumers’ and the business sector’s confidence in the financial markets, both in the Netherlands and abroad. In performing this task the AFM contributes to the prosperity and economic reputation of the Netherlands. 

The AFM is committed to promoting fair and transparent financial markets.

As an independent market conduct authority, we contribute to a sustainable financial system and prosperity in the Netherlands.

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