High popularity of take-home arrangement at mortgage closing

Mortgage applications recorded a remarkable increase in July compared to the previous six months. The current year 2023 has recorded an unprecedented number of mortgage applications so far, and that is not the only notable record. Also, the average income of applicants has never before reached such a high level. One particular feature is the growing popularity of the take-home scheme.

In the month of July, the number of mortgage applications rose to 33,000, which is an increase of 5,000 compared to the month of June. According to the Mortgage Data Network (HDN), a platform that facilitates the application and management process of various mortgage lenders, this increase is remarkable.

Diversity in mortgage applications for home purchases

The HDN categorizes mortgage applications based on intent, distinguishing between applicants applying for a mortgage to purchase a home and those seeking changes to their existing mortgage, such as conversions. Compared to July of last year, there was a 14% increase in the total number of mortgage applications. Especially notable is the 26% increase in mortgage applications for home purchases, providing a positive boost to the housing market that previously saw reluctance among buyers during the first half of the year.

Growing popularity of take-home arrangement

A notable trend is the rise of the take-home scheme. The number of mortgage applications using this scheme for home purchases has risen to more than 5,500. This increase is a doubling from July 2022. Given the significant increase in mortgage rates over the past year, there is a good chance that the interest rate on an existing mortgage is relatively more favorable. The portability scheme allows mortgage borrowers to transfer their existing mortgage, including the favorable interest rate, to their new home. This allows them to benefit from the lower interest rate for longer, provided, of course, that the terms and conditions allow it.

Increase in average income for mortgage applications

The average mortgage amount for home purchases rose to €339,500. Compared to July, there is a 2.5% increase in the amount buyers borrow relative to the value of the home. The Loan to Value (LTV) ratio stood at 77.8% in July, meaning that on average 77.8% of the home value is financed through the mortgage, while the remaining 22.2% is met from home equity.

Record income

The income of the average mortgage applicant reached a record high of €88,000, thanks to increased incomes over the past year. Starters on average have a combined income of €79,000 and applied for an average mortgage amount of €320,000, which is €10,000 lower than in the year 2022.

July was a positive month in terms of mortgage applications. Are you about to purchase a home and want to understand your financing options? Our advisors are ready to assist you and explore whether the portability scheme could be beneficial to you. So feel free to contact us. We'd love to help!