How risky is your mortgage in comparison to other homeowners?
The Dutch housing market appears to be recovering from the credit crisis. According to Calcasa, property prices in the first quarter of 2018 increased by 9% over the previous 12 months and 12% over the last 10 years. In a city as Amsterdam, house prices have even increased by 43% over the last 10 years.
Are we entering a new bubble and are prospective homebuyers aware of the risks they run when buying a home with a mortgage – for many borrowers this could be the most risky decision of their lives?
OSIS has developed a statistical model based on 40% of the Dutch mortgage market. Based of seven variables, the user can see how their mortgage payment risk is rated relative to other home owners with a mortgage. To the left of the picture are the least risky homeowners and on the right, the most risky.
In addition, the user can see how things look in the short term if there is a housing crisis as during the credit crisis (house prices fell 21%) or an even larger housing crisis as in the late 1970’s (house prices fell 35%). In the last check we do, we assume that only the user’s home is hit by the crisis and the others remains unchanged.
With this tool, OSIS hope that individuals become more aware of the risks they run when taking out a mortgage. The results of this model are indicative only and therefore OSIS accept no liability. OSIS will adjust and update the model in the future based on new empirical data which may change the results.