Norway's major banks raise mortgage interest rates
After Norway's central bank (Norges Bank) raised its key interest rate by 0.25 percentage points last week, the country's biggest lenders have announced higher interest rates.
On Thursday last week, the Central Bank of Norway raised its key interest rate from 2.75 to three percent.
As expected, Norway's commercial banks responded to the move by increasing their own interest rates on mortgages and deposits.
DNB, Sparebank 1, and Nordea increase rates
DNB was the first bank to raise its interest rate on mortgages and deposits – by up to 0.25 percentage points – on Monday.
"Against the background of Norges Bank's decision to raise the key interest rate by 0.25 percentage points at the interest rate meeting on March 23rd, DNB has decided to increase the interest rate on mortgages and deposits by up to 0.25 percentage points," Ingjerd Blekeli Spiten, head of personal markets at DNB, said in a stock exchange announcement on Monday.
Several banks have now followed suit. Later in the day, Nordea announced that they, too, were raising interest rates on both mortgages and deposits by 0.25 percentage points.
Sparebank 1 SR-Bank also raised mortgage interest rates by 0.25 percentage points, and the rate on deposits is being raised by up to 0.35 percentage points, according to the newspaper E24.
When do the changes take effect?
The new interest rates at DNB will apply from March 31st for new mortgages and from March 28th for new deposits. For existing loans and deposits, the rates will apply from May 11th.
Sparebank 1 SR-Bank announced that the new rates would apply from March 28th for new loans and from May 9th for existing loans.
The new interest rates for existing loans at Nordea will apply from May 9th.
New interest rate hike expected in May
Norges Bank believes there is a need for even higher interest rates to curb inflation. A new interest rate hike is expected as early as May.
"There is great uncertainty about the further economic development, but if things go how we now believe they will, we will raise the key interest rate further in May," Central Bank Governor Ida Wolden Bache said recently.
The forecast for the key interest rate has been adjusted upwards from the previous one, and the interest rate is expected to be raised again in both May and June - to a peak of 3.5 percent.
If the new forecast materialises, the mortgage interest rates will likely rise to 4.8 percent early next year.
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On Thursday last week, the Central Bank of Norway raised its key interest rate from 2.75 to three percent.
As expected, Norway's commercial banks responded to the move by increasing their own interest rates on mortgages and deposits.
DNB, Sparebank 1, and Nordea increase rates
DNB was the first bank to raise its interest rate on mortgages and deposits – by up to 0.25 percentage points – on Monday.
"Against the background of Norges Bank's decision to raise the key interest rate by 0.25 percentage points at the interest rate meeting on March 23rd, DNB has decided to increase the interest rate on mortgages and deposits by up to 0.25 percentage points," Ingjerd Blekeli Spiten, head of personal markets at DNB, said in a stock exchange announcement on Monday.
Several banks have now followed suit. Later in the day, Nordea announced that they, too, were raising interest rates on both mortgages and deposits by 0.25 percentage points.
Sparebank 1 SR-Bank also raised mortgage interest rates by 0.25 percentage points, and the rate on deposits is being raised by up to 0.35 percentage points, according to the newspaper E24.
When do the changes take effect?
The new interest rates at DNB will apply from March 31st for new mortgages and from March 28th for new deposits. For existing loans and deposits, the rates will apply from May 11th.
Sparebank 1 SR-Bank announced that the new rates would apply from March 28th for new loans and from May 9th for existing loans.
The new interest rates for existing loans at Nordea will apply from May 9th.
New interest rate hike expected in May
Norges Bank believes there is a need for even higher interest rates to curb inflation. A new interest rate hike is expected as early as May.
"There is great uncertainty about the further economic development, but if things go how we now believe they will, we will raise the key interest rate further in May," Central Bank Governor Ida Wolden Bache said recently.
The forecast for the key interest rate has been adjusted upwards from the previous one, and the interest rate is expected to be raised again in both May and June - to a peak of 3.5 percent.
If the new forecast materialises, the mortgage interest rates will likely rise to 4.8 percent early next year.
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