Good News for Future Homeowners

Since January 1, 2024, there has been good news for future homeowners in Belgium: mortgage application fees have been significantly reduced from €500 to €350. This change comes in response to the rising costs of mortgage applications in recent years and aims to make homeownership more accessible, especially for people taking out smaller loans. In this article, we’ll explore the reasons behind this fee reduction, what it means for homebuyers, and how digitalization plays a role in these changes.

Reduction in Application Fees: A Significant Saving for Homebuyers

The reduction in application fees is a crucial step in lowering the financial barriers to homeownership. The goal of the Flemish and federal governments is to make it easier and more affordable for potential homeowners to purchase a property. The costs associated with securing a mortgage can be a significant burden for many, particularly those taking out a smaller loan. By lowering the application fee from €500 to €350, the government hopes to ease this financial strain and make homeownership more accessible to a wider audience.

The Cause of Rising Mortgage Application Fees

Between 2014 and 2018, mortgage application fees increased by a staggering 50%, rising from €320 to €479. This price hike was seen as excessive, especially as there was no clear justification for such an increase. The Price Observatory found that these fees were often approaching the legal maximum of €500, making it unnecessarily expensive for homebuyers.

Economy Minister Pierre-Yves Dermagne called these fees "too high," pointing out that the flat-rate fees were especially burdensome for smaller loans, making it more difficult for many Belgians to become homeowners—especially during a period of rising real estate prices.

The Role of Digitalization in the Change

A key factor behind the reduction in application fees is the digitalization of banking services. Customers now provide information online more frequently, reducing the administrative burden for banks. Where banks previously needed significant time and resources to process paper documents and physical applications, much of this work is now done digitally. The digital transformation of banking services has lowered the processing costs, which are now being passed on to consumers in the form of reduced application fees.

This technological evolution has made the previously high application fees unjustifiable. The reduction to €350 reflects this advancement in banking technology and the shift in how financial institutions provide services.

What Does This Mean for Future Homeowners?

The reduction in application fees is a direct benefit for homebuyers. Instead of paying €500 for the administration of their mortgage, they now only need to pay €350. This means a saving of €150, which can help cover other costs associated with buying a home, such as notary fees or the deposit.

For those taking out smaller loans, such as first-time homebuyers, this difference is especially important. Lower interest rates or reduced application fees make purchasing a property financially more achievable, allowing more people to buy their dream home. It also lowers the cost of refinancing a mortgage, helping people to exit their loan more affordably.

Conclusion: A Step in the Right Direction for Homebuyers

The reduction in mortgage application fees is an important and welcome step for the Belgian housing market. By lowering the fees from €500 to €350, the government has made it easier for many Belgians to become homeowners, especially those taking out smaller loans. The digitalization of banking services has made this reduction possible, contributing to the accessibility of mortgages in the country. This decision not only helps ease the financial burden for homebuyers but also supports a more dynamic housing market in Belgium.