What foreign residents in Norway need to know to get a mortgage
The Local has spoken to some of Norway's leading banks to get all the info you need before committing to one of the largest purchases you're likely to make.
Buying a home in Norway as a foreigner can be a major investment in your future, but it's important to be familiar with the key aspects of both the Norwegian real estate market and the banking sector before doing so.
READ MORE: A beginner's guide to buying a home in Norway
Understanding your mortgage options, securing financing and being aware of additional costs are vital steps in the process if you want to ensure that everything develops smoothly and without unnecessary delays.
The process of getting a mortgage
For most people, arranging financing is one of the most important aspects of purchasing a home in Norway - regardless of whether they're a foreigner or a native.
Norwegian banks typically require a substantial down payment, around 15-25 percent of the property's purchase price (among the bigger lenders, most charge around 15 percent, while DNB charges 25 percent for international citizens).
READ MORE: Are Norway's mortgage requirements different for foreign residents?
Other than that, there are also several requirements that mortgage applicants need to meet.
"To get a mortgage in DNB, you need to have a Norwegian D-number or identification number. Norwegian banks will also require that you are employed in Norway and get your salary paid through a Norwegian bank account," Ingjerd Blekeli Spiten, Group Executive Vice President of Retail in DNB, told The Local Norway.
"Norwegian authorities also require that your total debt does not exceed five times your income and that you can pay a potential three percent increase in interest rates. Those requirements are the same whether you are an international citizen or not. For international citizens, the bank will normally require 25 percent of the property's sales value in equity. Due to anti-money laundry regulations, you must also document the origin of the funds you use for equity," Blekeli Spiten said.
SpareBank 1 Østlandet and Nordea have lower deposit thresholds for foreigners compared to DNB, usually coming in at around 15 percent.
Tips for foreigners who want to get a mortgage in Norway
Having a permanent job with a steady income is considered advantageous, according to what the chief of credit retail market at SpareBank 1 Østlandet, Stian Colberg, told The Local Norway.
"The bank does not want to give the customer a higher mortgage than the customer can service, as this would be unfortunate for both the customer and the bank. It is, for example, advantageous to have a permanent job with a steady income, and that you can show that you have your own finances in good order," Colberg said.
READ MORE: The hidden extra costs when buying property in Norway
At DNB, Norway's largest bank, they usually point prospective customers in the direction of their financial advisors so that they can get advice tailored to their specific situation.
Nordea follows a similar approach, recommending that people who want to inquire about mortgage options contact their customer service for more detailed information.
What makes the mortgage application process stumble - according to Norwegian banks
At SpareBank 1 Østlandet, a history of financial problems – such as defaulting on your debt – will be seen as a significant hurdle for people who want to take out a mortgage.
"If a customer seems to have little control over their own finances, it will be more difficult to get a mortgage. For example, if a customer has defaulted on other debt obligations, taken out large consumer loans that they are unable to repay or have a history of constantly paying late," SpareBank 1's Colberg told The Local.
READ MORE: Six key tips to survive the bidding war when buying a home in Norway
DNB has a similar line of reasoning regarding potential "red flags."
"All mortgage applications are individually handled by our advisors, who will do their best to offer advice and find solutions based on your economy. A red flag, for both national and international citizens, would usually be payment remarks or other signs that you don't manage your (personal) finances well," Ingjerd Blekeli Spiten said.
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Buying a home in Norway as a foreigner can be a major investment in your future, but it's important to be familiar with the key aspects of both the Norwegian real estate market and the banking sector before doing so.
READ MORE: A beginner's guide to buying a home in Norway
Understanding your mortgage options, securing financing and being aware of additional costs are vital steps in the process if you want to ensure that everything develops smoothly and without unnecessary delays.
The process of getting a mortgage
For most people, arranging financing is one of the most important aspects of purchasing a home in Norway - regardless of whether they're a foreigner or a native.
Norwegian banks typically require a substantial down payment, around 15-25 percent of the property's purchase price (among the bigger lenders, most charge around 15 percent, while DNB charges 25 percent for international citizens).
READ MORE: Are Norway's mortgage requirements different for foreign residents?
Other than that, there are also several requirements that mortgage applicants need to meet.
"To get a mortgage in DNB, you need to have a Norwegian D-number or identification number. Norwegian banks will also require that you are employed in Norway and get your salary paid through a Norwegian bank account," Ingjerd Blekeli Spiten, Group Executive Vice President of Retail in DNB, told The Local Norway.
"Norwegian authorities also require that your total debt does not exceed five times your income and that you can pay a potential three percent increase in interest rates. Those requirements are the same whether you are an international citizen or not. For international citizens, the bank will normally require 25 percent of the property's sales value in equity. Due to anti-money laundry regulations, you must also document the origin of the funds you use for equity," Blekeli Spiten said.
SpareBank 1 Østlandet and Nordea have lower deposit thresholds for foreigners compared to DNB, usually coming in at around 15 percent.
Tips for foreigners who want to get a mortgage in Norway
Having a permanent job with a steady income is considered advantageous, according to what the chief of credit retail market at SpareBank 1 Østlandet, Stian Colberg, told The Local Norway.
"The bank does not want to give the customer a higher mortgage than the customer can service, as this would be unfortunate for both the customer and the bank. It is, for example, advantageous to have a permanent job with a steady income, and that you can show that you have your own finances in good order," Colberg said.
READ MORE: The hidden extra costs when buying property in Norway
At DNB, Norway's largest bank, they usually point prospective customers in the direction of their financial advisors so that they can get advice tailored to their specific situation.
Nordea follows a similar approach, recommending that people who want to inquire about mortgage options contact their customer service for more detailed information.
What makes the mortgage application process stumble - according to Norwegian banks
At SpareBank 1 Østlandet, a history of financial problems – such as defaulting on your debt – will be seen as a significant hurdle for people who want to take out a mortgage.
"If a customer seems to have little control over their own finances, it will be more difficult to get a mortgage. For example, if a customer has defaulted on other debt obligations, taken out large consumer loans that they are unable to repay or have a history of constantly paying late," SpareBank 1's Colberg told The Local.
READ MORE: Six key tips to survive the bidding war when buying a home in Norway
DNB has a similar line of reasoning regarding potential "red flags."
"All mortgage applications are individually handled by our advisors, who will do their best to offer advice and find solutions based on your economy. A red flag, for both national and international citizens, would usually be payment remarks or other signs that you don't manage your (personal) finances well," Ingjerd Blekeli Spiten said.
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