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Which Norwegian banks are raising interest rates, and by how much? 

Interest rates in Norway are increasing, and several banks have announced hikes, meaning more expensive repayments for borrowers. So, which banks have announced rises and by how much? 

Pictured is a house and keys.
A number of Norway's leading banks have said that rates will be raised. Pictured is a house and keys. Photo by Tierra Mallorca on Unsplash

Norway’s key policy interest rate has been raised from 0.5 percent to 0.75 percent by Norway’s central bank, Norges Bank. 

As a result, several banks and lenders have raised their interest rates meaning higher repayments for those with loans and mortgages. For every quarter a percentage point, the interest rate on your bank loan rises, your annual interest costs will increase by 2,500 kroner for every million you owe.

An interest rate of 0.75 percent means yearly repayments of 7,500 kroner per million of debt. So, for example, if you have a loan or mortgage of four million, the annual interest costs will be around 30,000 kroner per year. 

Two of Norway’s biggest banks, Nordea and DNB, have said that they will be raising interest rates. 

DNB will be hiking rates by 0.25 percent from April 4th for new mortgages and from May 13th for existing mortgages. The bank will also be raising its deposit rate by 025 percentage points. The bank said that its best floating interest rate was for those on its BLU start offering, a mortgage for first-time buyers under 34. You can check out DNB’s interest rates here

Nordea has said that it is increasing rates by the same amount. The changes will happen for those who already have a mortgage from May 9th or March 29th for new mortgages. 

Sparebank 1 Nord-Norge was the first bank to raise mortgage rates. As with the other banks, it will be raising rates by 0.25 percentage points. The changes are effective from March 28th for new customers and May 6th for existing ones. 

Sparebanken Sør also said it was raising rates. The new terms apply for new mortgages and loans from March 30th. The rates for existing customers will change on May 11th for Mortgages. 

Sparebank 1 Nordmøre said it would raise Mortgage rates from 0.25 percent. 

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MONEY

EXPLAINED: What the revised national budget in Norway means for foreigners 

The Norwegian government has presented its revised budget for 2022. Here's The Local's roundup of some of the key proposals and what they mean for your wallet.

EXPLAINED: What the revised national budget in Norway means for foreigners 

Electric cars to become more expensive

The government will replace the VAT exemption for electric cars with a subsidy scheme. This means that electric cars that cost over 500,000 kroner will be subject to VAT, while EVs that cost less will be exempt from VAT. 

The government has said the cost of buying an EV with a sticker price of 600,000 would become 25,000 kroner more expensive. 

An EV costing more than a million kroner will become 125,000 kroner pricier, according to the government’s proposals. 

“If you can afford to buy a car for 1.7 million, it is only fair and reasonable that you also pay VAT,” Finance Minister Trygve Slagsvold Vedum said of the announcement

The scheme will come into effect next year. 

Free ferry tickets

All ferry journeys on routes with less than 100,00 passengers will be free from July 1st. This is likely to make around 30 of Norway’s 130 connections completely free of charge. 

The free trips will apply to local residents, tourists and other travellers. 

READ MORE: Why some ferry routes in Norway will be completely free this summer

It’ll become easier to get a better deal on energy prices 

The government will offer five million kroner in funding to help improve the Consumer Council’s electricity price comparison site strømpris.no.

The funding will make the comparison site better so that both spot price and fixed price customers can get the best energy deal available and save money. 

The government expects high electricity prices to continue

The government has written in its revised national budget that it expects high energy prices to continue. 

Tax revenues from the power companies will be used to cover the expenses of the electricity subsidy scheme, which sees the government pick up 80 percent of energy bills when the spot prices rise above a certain amount. 

Experts: Loan and mortgage repayments to increase faster

Loan and mortgage repayments could go up more quickly than anticipated due to increased oil spending, business and financial site E24 reports. 

In the revised budget, the government has said that it plans on spending 30 billion more of revenue from the oil fund than previously expected. 

“I think this is a somewhat more expansive use of money than Norges Bank (Norway’s central bank) had envisioned, and in that sense, I think that in isolation, it could contribute to a higher interest rate path, not strongly, but somewhat higher,” Kjersti Haugland, chief economist at DNB, told E24. 

If Norges Bank raises the key policy rate, lenders will follow suit meaning the loan or mortgage becomes more expensive to repay. 

Counties will be split up to improve local services

Viken will be divided into Akerhus, Buskerud and Østfold. Vestfold og Telemark will be split into two, as will Troms og Finnamrk. 

If parliament can make a final decision before the summer, the division will take place from January 1st 2024. 

The government wants to split the counties to improve the availability of local services in these areas, according to a press release from the Ministry of Local Government

Air passenger tax scrapped for the rest of the year

The air passenger tax, which was shelved for the last few years, will also be frozen until the end of the year. 

Cut in support for public transport

The government will be cutting its support scheme for public transport firms hit by a loss of income related to the pandemic from July 1st. 

For consumers, this means that some firms will cut the routes they offer due to the funding ending. 

Ruter has said that it is already cutting the number of routes from July 4th as passenger numbers are not back to pre-pandemic levels.Routes could also be cut in Oslo and Viken

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