Rising house prices reduce the financial risk of the mortgage loan


The financial risk of a home mortgage has decreased significantly in recent years. House prices rose sharply, while mortgages grew more slowly. As a result, far fewer homes are now ‘under water’, reports the Central Bureau of Statistics (CBS).

A house is “under water” if the mortgage debt is greater than the value of the house. This can cause problems when selling the house. In 2020, 6% of owners had a house “under water”, compared to 33% in 2014.

After the most recent measurement, the number has only dropped further, a CBS spokesperson said. Indeed, mortgages must now be repaid and houses have only increased in value.

Especially among owners under the age of 25, the house is sometimes worth less than the mortgage debt, but two years ago this was only the case in 15% of cases in this group. In 2014, this figure was still 62%. That year, the number of so-called undervalued homes was at an all-time low. Indeed, house prices fell sharply in the years following the 2008 credit crisis.

17% of homeowners had no mortgage debt in 2020. This has become increasingly common in recent years.

Households with their own dwelling

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