Belgium to further cap mortgage application fees

The fees charged by banks and other credit providers to apply for a mortgage will be capped at €350 from next year.

The new cap applies from 1 January 2024, a decrease from the current maximum application fee of €500.

The move was announced by Belgium’s minister of economy and employment Pierre-Yves Dermagne (Socialist), following approval of a legislative text by the government’s council of ministers.

This is the second time that the government has fixed a legal limit on mortgage application fees. The first, in 2017, was to set a €500 maximum fee.

This latest decision followed a study from Belgium’s economics ministry showing that, between 2014 and 2018, credit providers have raised the price to apply for a mortgage by an average of 50%, from €320 to €479, and without any apparent valid reason, other than that it still falls within the maximum legal cap.

Dermagne, also Belgium’s deputy prime minister, said it was again time to act.

"If you look at the evolution of prices, you can see that today, all credit establishments have raised dossier charges to reach the maximum €500 limit. These fees make it more difficult to buy a house. They are also very damaging for small loans, as they represent a lump sum."

Banking operations are carried out increasingly online, Dermagne said. This means that financial institutions are cutting back on their branches and their services.

“Therefore, the reduction in costs that this represents is not felt by consumers, indeed, quite the opposite,” the minister added.

People looking to change their existing mortgage will also benefit from the new measure. In this case, dossier charges will not be able to exceed half the amount to apply for the initial contract.