Interest Rate Averaging

The key points at a glance

Interest rate averaging (rentemiddeling) is a way to take advantage of a lower interest rate even during a fixed-rate period. It involves breaking open the fixed-rate period so you can benefit from a lower rate. On this page you can find out exactly what rentemiddeling involves and how to go about it.

1. What is interest rate averaging?

If you've had a mortgage for a while, the interest rate may have dropped since you took it out. When that happens, you naturally want to benefit from the lower rate. One way to do this is through interest rate averaging (rentemiddeling). With this arrangement, a new interest rate is determined by taking the average of your old rate and the current rate. This means you get a lower rate on your existing mortgage while also giving the bank some compensation for the income it loses from the lower rate.

Banks are no longer allowed to make a profit from interest rate averaging. The interest surcharge will therefore never exceed the amount the bank loses out on by giving you the lower rate. Not every mortgage provider offers interest rate averaging.

2. What benefit can I get from interest rate averaging?

Are you thinking about interest rate averaging, or wondering whether you qualify and what it could save you? It's a method that lets you spread the penalty interest that a mortgage provider can charge when you switch your mortgage or break the fixed-rate period, spreading it over the remaining term of the mortgage. Through interest rate averaging, you and the bank can reach a compromise that avoids an upfront penalty payment. The new rate is also fully tax-deductible. That said, breaking the fixed-rate period or switching your mortgage outright may sometimes be more advantageous, depending on the penalty amount and the benefit you'd gain from the new rate. It's therefore important to get good advice about any new interest rate arrangement.

3. Penalty interest

If you want to switch your mortgage or break the fixed-rate period to take advantage of a lower current rate, there's a good chance the mortgage provider will charge you a penalty, to compensate for the income the bank will miss out on. The bank will calculate the penalty amount for you. A mortgage adviser can help you assess whether switching the mortgage or breaking the fixed-rate period is still worth it, particularly when the current rate is significantly lower than your existing one.

4. Pros and cons of interest rate averaging

Pros

• You pay less interest on your mortgage, so your monthly costs go down.
• Your mortgage is not increased.
• The new interest rate is locked in again for a longer period.
• You don't pay an upfront penalty; instead, the bank's loss is factored into the new rate.

Cons

• Not all mortgage providers offer interest rate averaging.
• It only becomes interesting to look at interest rate averaging when your mortgage has been running for some time.
• The rate cannot be lowered again during the new fixed-rate period.

5. Conditions for interest rate averaging

Want to find out whether you can use interest rate averaging when you're considering breaking the fixed rate or switching your mortgage? Check the mortgage terms you received from your bank. It's also wise to contact your bank directly and ask the question. It isn't always possible to use this option. If interest rate averaging isn't available to you, you'll need to weigh the penalty against the interest saving to make your own decision.

6. Providers offering interest rate averaging

Whether a mortgage provider offers interest rate averaging varies per provider. We've listed them below.

Mortgage provider	Interest rate averaging	Notes
ABN AMRO	Yes
AEGON	No	AEGON stopped offering interest rate averaging on 1 September 2019.
Allianz	Yes
Argenta	No
ASN	No
a.s.r.	No
Attens	No
BijBouwe	No
BLG Wonen	Yes
BNP Paribas	Yes
Centraal Beheer	Yes
Florius	Yes
HollandWoont	Yes
Hypotrust	Yes	Only available for the Vrij Leven Hypotheek
ING	No
IQWOON	No
Lloyds Bank	No
Lot Hypotheken	No
Merius	Yes
Moneyou	Yes
Munt Hypotheken	No
Nationale Nederlanden	Yes
NIBC Direct	No	Temporarily unavailable due to new regulations.
Obvion	Yes	Only available for the Obvion Hypotheek
Philips Pensionfonds Hypotheken	No
Rabobank	No	Temporarily unavailable due to new regulations.
Reaal	No
Regiobank	Yes
Robuust	Yes
SNS Bank	Yes
Syntrus Achmea	No
Triodos Bank	No
Tulp Hypotheken	No
Van Lanschot	Yes
Venn Hypotheken	No
Vista Hypotheken	No
WestlandUtrecht Bank	Yes
Woonfonds Hypotheken	Yes