SHARE
COPY LINK
For members

PROPERTY

How easy is it to get a mortgage in Norway as a foreign resident? 

Is getting a mortgage for foreign residents in Norway a breeze, or are there plenty of hoops to jump through? Here's what you need to know. 

Ever wondered how straightforward it is for a foreigner to get a mortgage. Pictured is a typical Norwegian coastal house with a cruise ship sailing past in the background
Ever wondered how straightforward it is for a foreigner to get a mortgage. Pictured is a typical Norwegian coastal house with a cruise ship sailing past in the background. Photo by Vidar Nordli-Mathisen on Unsplash

The first step towards buying a home in Norway begins with a mortgage application, but how much red tape is there for foreign residents when it comes to securing a loan? 

One of the first things you’ll need to know is that there are no rules that prevent foreigners from owning or buying property in Norway, so you’re all set to begin the hunt for your dream home in that regard. 

You’ll be able to apply for a mortgage from most traditional banks in Norway. In addition, there is also the Norwegian State Housing Bank, Husbank, which provides grants for building new houses and renovating properties. 

Municipal startup loans are also an option for those struggling to get a mortgage from a typical bank. You can read more about municipal startup loans here. How municipal loans are granted will depend on the practices of the local authority in question. 

READ ALSO: Is it better to buy or rent property in Norway?

Once you’ve found your provider, it’s time to sit down with them and discuss the mortgage itself. 

If you want to read more about property in Norway, ranging from a guide to buying in Oslo to whether or not solar panels are worth investing in, click here

What paperwork will I need? 

The documents you need will vary, but generally, you’ll need your financial records, such as payslips, as proof of your income. In addition, the bank may ask for your tax records too. You will also need a Norwegian Identification Number, such as a D-number or Personummer. You will not be able to secure a mortgage or buy any property without the ID number. 

This could be one of the main stumbling blocks for foreign residents new to Norway. 

Another hurdle could be a lack of credit history in Norway if you have been in the country for less than a year, sometimes longer. The lack of credit history, which doesn’t carry over from the country you came from, could hold up the process or prevent you from getting a mortgage entirely. 

For those that have already lived in Norway for a while, getting a mortgage should be straightforward as banks will already have an identification number and credit history.

If you are applying for a loan with a Norwegian partner, then it may be possible to secure a housing loan without much credit history in Norway, but this will come at the cost of higher rates.

How much can I borrow

Generally speaking, you’ll be able to borrow either three times your annual income or up to 85 percent of the price of the property. Top-up loans are an option for those unable to put down 15 percent upfront. 

Furthermore, first-time buyers can apply for a special mortgage where you can borrow 100 percent of the purchase price, and the interest rate will be fixed for the duration of the mortgage. 

The repayment period in Norway is typically between 20 to 30 years. You can check out and compare mortgage providers here

It’s worth being aware that mortgage rates are rising in Norway after being set to zero throughout the pandemic. This means you should expect the interest rates to increase and the repayments to become more expensive for the first few years after taking out your mortgage. Therefore, you should try and factor the increasing repayment costs into your budget if you can. 

READ MORE: Norwegian lenders raise interest rates after central bank hike

Another thing worth highlighting is that you should receive the all-important official mortgage approval document once your application has been approved. You will need this to purchase a house in Norway.  

Vocab

  • Visninger- Viewing
  • Boligån- Mortgage
  • Nybygg- New build 
  • Eiendomspriser- Real estate prices
  • Budrunde- Bidding process
  • Selvangivelse – tax assessment
  • Bolig konto– house account
  • Gjennomsnittspris – average price

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members

PROPERTY

Key mistakes to avoid when bidding on a house in Norway 

Norway's house bidding process is equally stressful and confusing, but before putting in an offer, you should make sure you aren't making any of these costly mistakes. 

Key mistakes to avoid when bidding on a house in Norway 

Buying a house is normally stressful enough, whether it’s getting a mortgage in place, going to dozens of viewings or spending hours going through listings. 

In Norway, the process is further complicated by the house bidding process, which you will have to go through when buying most properties today.

Additionally, you could make several mistakes that could make the process harder or cost you dearly. 

READ ALSO: 

Not having financing in place

Before you can bid on a property, you need to visit the bank to ensure financing for your purchase. If you are taking out a mortgage on the house, you will need to make sure you know the set limit the bank will allow to borrow. 

When you make a bid, the estate agent will contact the bank to ensure that you have the financial arrangements. If you do not have enough money or the mortgage your bank agreed on doesn’t cover the cost, your bid will be rebuffed. 

Therefore it is crucial to know your financial limits when entering bidding rounds to avoid any disappointments. 

Making a bid on a house you aren’t sure about

You should be absolutely sure that you could see yourself living in a property when you bid on it. This is because bids in Norway are legally binding, meaning that even if you put in a speculative bid and it’s accepted, you won’t be able to back out.

This means that you should avoid putting in any offers on homes you aren’t 100 percent sure about.

So while you may be in a rush to get on the property ladder or take a step up, patience will prevail over diving in headfirst. 

Forgetting to do proper research

The devil is always in the detail, and as dull as it may be, you should always read the small print to avoid any nasty shocks. 

This is especially important when buying apartments in Oslo and other cities where you will likely encounter housing associations where residents will be expected to pay various fees or contribute to the upkeep of the block. 

“For instance, if they are planning to replace the roof of the block the next year, you will read about it in the sales documents. It is important to consider whether you can afford a property also after potential add-ons,” Trine Dahl-Pettersen, real estate agent at Eindom 1, explained to The Local

Reading the small print isn’t the only place where research pays off. For example, one reader who has bought a house in Norway pointed out that finding a place that needs a little bit of work can help you avoid intense bidding wars, and locals tend to want a ready-made home to move into. 

“Finding a property that won’t go sky high over the asking price when bidding can be challenging. However, I quickly noticed that Norwegians are not afraid to bid high for a ready-to-go home,” Scott told The Local of his experiences buying in Bergen. 

“If you are comfortable doing some work on it, you can find a much better deal, maybe even under the asking price,” he added.

Therefore, market research can help prevent you from paying over the odds. 

Making more than one bid at a time

Unfortunately, putting plenty of bids out and seeing which offers stick could be a lot more disastrous than you may think. 

As mentioned earlier, bids in Norway are legally binding. Meaning that if you have two bids accepted at the same time, you will be legally obligated to purchase both of them.

Not having BankID

Despite the bidding process being done over the phone, there are still some hoops to jump through. 

You’ll need to have a Norwegian Bank ID available for the bidding process, as it is needed to confirm your identity when sending your bids. 

Without this, you won’t be able to lodge any offers. 

In addition to bank ID, you will need a Norwegian identification number (D-number/Personnummer) to hand. 

SHOW COMMENTS