Are Norway's mortgage requirements different for foreign residents?
Sooner or later, many foreign residents in Norway will want to get on the property ladder. The Local spoke to the biggest lenders to find out if there are any specific mortgage requirements, such as steeper deposits, in place for foreigners.
The requirements for getting a mortgage in Norway vary depending on the bank or lender you decide to go with, as well as the type of mortgage you're looking to apply for.
As a general rule, it's always a good idea to look around and compare different mortgage options and lenders in order to find the best offer and interest rates.
Oftentimes, you can even take an offer that you got from one lender and then ask a competitor if they would be willing to give you a better deal.
Regardless of your individual circumstances, the typical requirements for getting a mortgage in Norway usually include the following:
- Proof of identity: To start off, you'll be required to provide the lender with proof of identity (think passport, ID card, or a driver's license).
- Proof of employment and income: Lenders will almost certainly request proof of income to assess whether your income can withstand mortgage payments over a set period. Examples include employment contracts, tax returns, pay slips, and similar documents.
- Credit score: Lenders in Norway – such as, for example, DNB – will usually run a credit score check before approving a mortgage. A good credit score can improve your odds of landing better mortgage conditions.
- Deposit: Different lenders have different down payment requirements, but – as a general rule of thumb – expect to pay between 10 and 20 percent of the total price as a depoist.
Along with the four above mentioned requirements, there are also other – often more in-depth – prerequisites that lenders can insist on before granting mortgages, so make sure to check which conditions apply to your lender of choice.
With the typical requirements out of the way, we will now focus on whether foreigners in Norway face any additional hurdles in the process of getting a mortgage.
Are there specific mortgage requirements for non-Norwegian citizens?
Norwegian lending regulations do not discriminate between mortgage applicants based on nationality. However, some lenders do have different mortgage conditions in place for international citizens.
DNB, Norway's largest bank, told The Local that it usually requires higher deposits from foreign residents.
"We offer mortgages to foreign nationals based on individual assessment. We usually require 25 percent equity, which is 10 percent higher than we require from Norwegian citizens," Lukas Loeb at DNB told The Local.
Three other lenders that The Local has contacted - Sbanken, SpareBank 1 Østlandet, and Danske Bank Norway - stated that foreign residents applying for a mortgage in Norway are mostly subject to the same requirements as Norwegians.
Theodor Barndon Helland, a press officer at Sbanken, told The Local that the mortgage rules are the same for all applicants.
"There are no differences in the rules for Norwegian and foreign residents when it comes to getting a mortgage, and the rules are the same for everyone. One of these rules is that one is required to have a Norwegian birth and social security number, which may take some time to be assigned to foreign citizens.
"However, the authorities decide on these rules, not any individual bank. When mortgage applications are considered, an individual credit assessment is carried out, which is also not dependent on nationality.
"A basic requirement is the lending regulations, which regulate requirements for being applicable for a mortgage such as a debt ratio of less than five, and a loan-to-value ratio of less than 85 percent of the property's value. These rules are also set by the authorities, and (they) do not distinguish between nationality," Helland stated.
The communication manager at SpareBank 1 Østlandet, Bjørnar Mickelson, said that there were no differences in mortgage requirements between foreigners and Norwegian residents at SpareBank 1.
"Foreign residents applying for a mortgage in Norway will mainly be subject to the same requirements as Norwegian residents.
"The Norwegian mortgage regulation defines a maximum loan to value of 85 percent, a minimum yearly repayment of 2.5 percent (if "Loan-To-Value", meaning the mortgage's part of the house's value, > 60 percent), a maximum loan of five times gross income, and customers' disposable income must be able to withstand all relevant costs, as well as a three percentage points-mortgage rate increase," he specified.
Red flags for lenders
As Øystein Schmidt, the head of communications at Danske Bank Norway, told The Local, lenders pay particular attention to certain signals during the application assessment process.
"All in all, there are not too many differences in regard to the process of being granted a mortgage between Norwegian citizens and foreign citizens.
"To be able to have a mortgage with us, the first requirement is that you have a D-number, given to foreign citizens living in Norway that do not have a national identity number.
"Secondly, we have to be able to establish that you have income here in Norway – that you have some kind of economic ties here - and that you don't have commitments abroad money-wise that would make it complicated for you to pay off your mortgage.
"If you have a proven credit history in Norway from before, that's a plus, as it's easier for the bank to know who you are as a customer.
"According to regulation, we have to be able to establish who you are and what connection you're looking to have with the bank. This is also called KYC regulations – Know Your Customer. These are processes we have to go through if you're a Norwegian citizen or not, and even if you're not planning to apply for a mortgage.
"Apart from that, it helps the bank if we get to know your plans in regard to how long you're planning to stay here in Norway. If you've just gotten a job here and are planning to move, maybe permanently or for a number of years, that helps us get to know you as a customer," Schmidt explained.
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The requirements for getting a mortgage in Norway vary depending on the bank or lender you decide to go with, as well as the type of mortgage you're looking to apply for.
As a general rule, it's always a good idea to look around and compare different mortgage options and lenders in order to find the best offer and interest rates.
Oftentimes, you can even take an offer that you got from one lender and then ask a competitor if they would be willing to give you a better deal.
Regardless of your individual circumstances, the typical requirements for getting a mortgage in Norway usually include the following:
- Proof of identity: To start off, you'll be required to provide the lender with proof of identity (think passport, ID card, or a driver's license).
- Proof of employment and income: Lenders will almost certainly request proof of income to assess whether your income can withstand mortgage payments over a set period. Examples include employment contracts, tax returns, pay slips, and similar documents.
- Credit score: Lenders in Norway – such as, for example, DNB – will usually run a credit score check before approving a mortgage. A good credit score can improve your odds of landing better mortgage conditions.
- Deposit: Different lenders have different down payment requirements, but – as a general rule of thumb – expect to pay between 10 and 20 percent of the total price as a depoist.
Along with the four above mentioned requirements, there are also other – often more in-depth – prerequisites that lenders can insist on before granting mortgages, so make sure to check which conditions apply to your lender of choice.
With the typical requirements out of the way, we will now focus on whether foreigners in Norway face any additional hurdles in the process of getting a mortgage.
Are there specific mortgage requirements for non-Norwegian citizens?
Norwegian lending regulations do not discriminate between mortgage applicants based on nationality. However, some lenders do have different mortgage conditions in place for international citizens.
DNB, Norway's largest bank, told The Local that it usually requires higher deposits from foreign residents.
"We offer mortgages to foreign nationals based on individual assessment. We usually require 25 percent equity, which is 10 percent higher than we require from Norwegian citizens," Lukas Loeb at DNB told The Local.
Three other lenders that The Local has contacted - Sbanken, SpareBank 1 Østlandet, and Danske Bank Norway - stated that foreign residents applying for a mortgage in Norway are mostly subject to the same requirements as Norwegians.
Theodor Barndon Helland, a press officer at Sbanken, told The Local that the mortgage rules are the same for all applicants.
"There are no differences in the rules for Norwegian and foreign residents when it comes to getting a mortgage, and the rules are the same for everyone. One of these rules is that one is required to have a Norwegian birth and social security number, which may take some time to be assigned to foreign citizens.
"However, the authorities decide on these rules, not any individual bank. When mortgage applications are considered, an individual credit assessment is carried out, which is also not dependent on nationality.
"A basic requirement is the lending regulations, which regulate requirements for being applicable for a mortgage such as a debt ratio of less than five, and a loan-to-value ratio of less than 85 percent of the property's value. These rules are also set by the authorities, and (they) do not distinguish between nationality," Helland stated.
The communication manager at SpareBank 1 Østlandet, Bjørnar Mickelson, said that there were no differences in mortgage requirements between foreigners and Norwegian residents at SpareBank 1.
"Foreign residents applying for a mortgage in Norway will mainly be subject to the same requirements as Norwegian residents.
"The Norwegian mortgage regulation defines a maximum loan to value of 85 percent, a minimum yearly repayment of 2.5 percent (if "Loan-To-Value", meaning the mortgage's part of the house's value, > 60 percent), a maximum loan of five times gross income, and customers' disposable income must be able to withstand all relevant costs, as well as a three percentage points-mortgage rate increase," he specified.
Red flags for lenders
As Øystein Schmidt, the head of communications at Danske Bank Norway, told The Local, lenders pay particular attention to certain signals during the application assessment process.
"All in all, there are not too many differences in regard to the process of being granted a mortgage between Norwegian citizens and foreign citizens.
"To be able to have a mortgage with us, the first requirement is that you have a D-number, given to foreign citizens living in Norway that do not have a national identity number.
"Secondly, we have to be able to establish that you have income here in Norway – that you have some kind of economic ties here - and that you don't have commitments abroad money-wise that would make it complicated for you to pay off your mortgage.
"If you have a proven credit history in Norway from before, that's a plus, as it's easier for the bank to know who you are as a customer.
"According to regulation, we have to be able to establish who you are and what connection you're looking to have with the bank. This is also called KYC regulations – Know Your Customer. These are processes we have to go through if you're a Norwegian citizen or not, and even if you're not planning to apply for a mortgage.
"Apart from that, it helps the bank if we get to know your plans in regard to how long you're planning to stay here in Norway. If you've just gotten a job here and are planning to move, maybe permanently or for a number of years, that helps us get to know you as a customer," Schmidt explained.
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