German banks start mortgage war in the Netherlands

Consortium of 20 German financial groups, including Deutsche Bank and Allianz, is entering the Dutch mortgage market by offering a repayment mortgage with an interest rate of around 2.8 per cent, Dutch newspaper Volkskrant reported Friday. Dutch banks will thus be highly challenged as the average rate for a standard repayment mortgage in the Netherlands range between 3.9 percent and 4.5 percent. The German mortgages will be for sale through 20 independent mortgage advisors spread across the country. Rob Jansen, Director of Adfinis, one of the companies involved, said the phone had been constantly ringing since the news was published in the national newspaper. "We wanted to keep the news local but house buyers from all over the country have been phoning us," he told the paper. According to the newspaper, the consortium possesses around 200 billion euros (260 billion U.S. dollars), which is four to five times the total annual mortgage production in the Netherlands. A German anonymous financial advisor told the Volkskrant that the German banks are "swimming with money and looking for new markets." "Unlike Dutch banks, the Germans are not in financial difficulties," he said, adding "in Germany everyone repays their mortgage. There is no such thing as an interest-only loan."