AFM publishes notional interest rate for mortgages

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As of the second quarter of this year, the Netherlands Authority for the Financial Markets (AFM) will publish the notional interest rate for mortgages with a fixed-interest period of less than ten years. In doing so, the AFM will be implementing a new statutory regulation. The AFM will publish the new notional interest on its website at most fourteen days before the start of the new quarter.

Borrowing capacity

A notional interest rate has to be assumed for mortgages with a fixed-interest period of less than ten years in order to establish whether a mortgage is responsible. If the actual interest rate is higher than the notional interest rate, the actual interest rate is used for the calculation. Making use of the notional interest rate means that consumers are prevented from getting into financial difficulties as a result of interest rate increases after the end of the fixed-interest period.

The notional interest rate was determined by the Dutch Banking Association (NVB) and was published on the NVB website up to and including the first quarter of 2014.

How does the AFM determine the notional interest rate?

The AFM determines the notional interest rate on the basis of the Temporary regulation mortgage credit (available in Dutch only). The basis for the calculation is the average of the applicable mortgage interest rate of several providers with the largest market share by number of mortgages provided. The notional interest rate is always at least 5 percent.

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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