How hard is it for a single person to buy a home in Norway?

Norway has a housing model which aims to ensure as many people as possible become homeowners. 

It does so through several incentives such as interest rates, subsidies, and down payment assistance for first-time homebuyers. 

As a result, around 80 percent of people in Norway own their own homes. Typically, though, it's easier for couples to get on the property market as they have two income pools and savings pots to draw from. Two people contributing to rent makes saving for a deposit easier.

Have you managed to get on the property ladder in Norway while single? If you want to share how you found the process, and how you did it you can get in touch at [email protected]. 

Higher deposit rates for foreigners create an additional stumbling block

Different lenders have different down payment rules, and depending on your credit score, savings and any collateral against the loan, a deposit of around 10-20 percent is required to secure a mortgage in Norway. 

While Norwegian lending regulations do not discriminate between mortgage applicants based on nationality, some lenders impose their own requirements on foreigners. 

DNB, Norway's largest bank, has previously told The Local that it usually requires higher deposit rates from foreign residents. It asks for 25 percent equity, rather than the average 15 percent for Norwegian citizens. 

However, several banks have told The Local that their conditions are subject to other factors, such as whether the applicant has an income in Norway and a credit history in the country. 

If a bank does ask for 25 percent, that is a sizeable deposit. In that case, it may be worth choosing a lender that only asks for 10-15 percent of equity.  

House prices, rent and interest rates

Three other housing factors combine to make it harder for single people to get on the property ladder. For starters, rent prices have increased steeply in recent years. 

The average house price in Norway is 4.3 million kroner, meaning a significant chunk of cash is needed to secure a mortgage.

Generally, there is a lack of rental housing in Norway's largest cities, and a combination of low construction and tax rules means the issue is unlikely to be remedied any time soon.

This means that unless singles consider a flatshare, they can expect to fork out for high rents. In Oslo, the cost of a two-room (not two-bedroom) apartment is around 15,000 kroner per month, according to figures from the rental agency Hybel. 

Thankfully, a room in the capital costs just under half that. 

In Bergen, a two-room place costs an average of 12,000 kroner per month. In Trondheim, things were similar. 

High-interest rates also mean it is harder to get a mortgage and more expensive to repay. Applicants in Norway are stress-tested for interest rate increases of up to 3 percent. This means plenty of income is required to pass stress tests. 

Are there any measures to make it easier to buy a home if you're single? 

Unfortunately, many of the incentives that make up the Norwegian housing model are geared towards couples and young families. 

Firstly, thinking hard about where you want to live is one thing. If you live less centrally, getting on the property ladder will be cheaper as prices will be lower. The obvious downside to this is making the compromise, on top of any commuting you will have to do due to moving. 

However, it's worth pointing out that many of Norway's other big cities are much cheaper than Oslo. This means that you can continue to live in a city and buy a home, you just might need to take your life and career to a different part of Norway. 

Secondly, you should get in touch with a bank to find out how much you can borrow. This will give you an impression of whether you are close to achieving your dream or not. It can also give you a timeframe on how long it will take to reach your goal. 

There are also high-interest savings accounts aimed at those saving for a home. If you are under the age of 33, you can begin saving with a BSU account. These accounts also come with a sizeable tax deduction. 

You can also decide to buy with someone else. However, when purchasing with someone else, say a friend, you must be sure you can trust them as you will both be responsible for the mortgage. A clear contract will be required, too. 

When banks give loans to friends buying together, the terms usually have a shorter repayment period as they don't expect the friends to live together for as long as a married couple. 

A co-borrower or real estate surety can also help make things easier. However, foreigners typically need a parent in Norway they can ask to co-borrow with or to use a guarantor. 

Those close to having enough equity to secure a mortgage can apply for a "top-up" loan. These loans give you the required amount of equity to put down as a house deposit. 

Some people may be able to apply for a start-up loan. This mortgage is aimed at helping those struggling to get on the property ladder. There are several conditions that single people may have issues meeting unless they have children, so it is worth reading about the various conditions.