Mortgage rates rise in Belgium for first time since 2003

One of Belgium's main high street banks, Dexia, has announced a hike in mortgage rates.It's the first time in two-and-a-half years that a Belgian bank has increased its rates - the standard interest rates for people taking out a 20-year loan will amount to 5 percent in future. The announcement was expected, as interest rates - both short and long-term - have been increasing around the world recently. An economic revival and rising inflation are believed to be the major contributory factors. "We have no choice but to increase our interest rates if we want to keep a profit margin," Gunther De Caluwé of Dexia told the financial
newspaper 'De Tijd'. As a result, more and more people building a house or buying property are opting for a fixed-rate mortgage. This is slightly more expensive, but it protects borrowers against any future increases in mortgage rates. Other Belgian banks are expected to follow suit - KBC has also announced an increase, but is not sure when it will come into effect. Fortis, the biggest mortgage supplier in Belgium, will also increase its rates, while ING adapts its interest rates on a weekly basis.