Owning your home is an expensive business in the Netherlands. Mortgages are often a hefty expense, partly because of the interest we pay back to the bank. In neighbouring countries like Germany, France and Belgium, house-owners pay far less interest on their mortgage. Why isn’t this the case in the Netherlands?
Lack of competition
According to M.P. Schinkel, professor of competition economics at the University of Amsterdam, the steep mortgage interest in the Netherlands is created by a lack of competition on the mortgage market. In ZEMBLA, Schinkel says that this leads to Dutch home-owners paying excessive interest, amounting to thousands of euros, on their mortgages.
Wouter Bos could have prevented high mortgage interest
In 2009, Wouter Bos, the former Dutch Finance Minister, turned down European Commissioner N. Kroes’s offer of not subjecting the ING in the Netherlands to a price leadership ban. This emerges in correspondence between Kroes and the Netherlands Competition Authority (NMa), in the possession of ZEMBLA. M.P. Schinkel, professor of competition economics and at the University of Amsterdam, claims that Bos’s decision has led to the absence of a competitive mortgage market in the Netherlands. Schinkel’s calculations suggest that, as a consequence, Dutch home-owners are paying excessive interest amounting to thousands of euros, on their mortgages
ZEMBLA investigates: Are Dutch banks charging a fair price, or are Dutch home-owners paying over the odds on their mortgage interest?