More and more pension funds are offering mortgages. Do these new lenders provide more competition for the banks?
Pension funds have been allowed to offer mortgages for some time and the government is also calling on the funds to invest more in the Netherlands. A number of pension funds have recently taken the step and are going to compete directly with the banks. Two new initiatives have recently been launched:
Good finance launched the Good Lender brand in July 2014. This involves collaboration with a large number of smaller pension funds. In this way Good Lender immediately has more than 50 years of experience in offering mortgages. Update: As of November 1, Good Lender will stop mortgages (for the time being).
In October, Good finance launched the GoodZ label together with the member organization for the Zorg in Welzijn Pension Fund (PGGM & CO). Unique: only members of this pension fund can get a mortgage from GoodZ.
Low interest on long fixed-interest periods
Pension funds have a long investment horizon and this is reflected in the mortgages offered. Currency Mortgages and Good Lender are strong on the long-term fixed-rate periods. For the 20-year fixed and 30-year fixed periods, the pension funds offer a low mortgage interest rate. Because these new lenders do not have their own distribution network, the mortgages are only offered through independent mortgage advisors.
Shifts in the mortgage market
We are seeing a clear shift in the mortgage market: Banks are withdrawing due to stricter capital requirements and pension funds are jumping into this gap. The Dutch mortgage market is an interesting investment for pension funds. The return is good and the risks limited (NHG and repayment). We expect this trend to continue in the coming years. Pension funds that go into mortgages are not entirely new. Earlier, the capital of Good finance , Aegon and Obvion was brought together with the help of pension funds.