How to change your mortgage provider in Norway, and why you should consider it

Securing a mortgage in a foreign country marks a significant milestone in one's journey towards homeownership, often accompanied by a sense of achievement and relief.

Once the (digital) ink dries on the mortgage agreement, many people in Norway shift their focus to making ends meet and settling into their new homes.

READ MORE: What foreign residents in Norway need to know to get a mortgage

It's common for homeowners to become complacent, assuming that their initial mortgage deal remains favourable.

However, failing to explore alternative mortgage opportunities could mean you're missing out on substantial savings in the long run.

Moving your mortgage: A daunting task?

Amidst the hustle and bustle of settling into a new home, a lot of homeowners don't even think about the possibility of transferring their mortgage to another bank in Norway.

Loyalty to one's bank is a big thing in Norway, so many people hesitate to venture beyond the familiar territory of their current banking institution.

READ MORE: A beginner's guide to buying a home in Norway

Yet, contrary to popular belief, the process of switching banks is far more straightforward than imagined.

Remember, the chances are your property has appreciated in value over time. This uptick in value serves as a motivating factor for banks to consider offering you a lower interest rate than what was initially presented when you secured your mortgage.

If your current bank isn't willing to match or beat the best offer available elsewhere, it's a good idea to explore the option of transferring your loan.

Don't feel embarrassed if the mere prospect of initiating a mortgage transfer makes you feel anxious - it's a common reaction. After all, who likes paperwork and negotiations, right?

However, with the rise of digital banking solutions and streamlined application processes, transitioning to a new bank is actually quite convenient in Norway – especially when compared to some other countries in Europe.

With tools like BankID, establishing a new banking relationship and signing the necessary documentation can be done entirely online, eliminating the need for in-person visits.

READ MORE: Everything foreigners in Norway need to know about electronic IDs

The standard process usually takes between 30 and 40 minutes, with the new bank handling the transfer of agreements – including any necessary agreement cancellations – from the old bank.

Also, the fact that not all banks require you to register as a customer in order to apply for a mortgage helps speed up the process, as you can often get a non-binding offer by logging in through your BankID.

There are also several online comparison platforms – such as Bytt.no and Lendo.no – that allow you to get and compare mortgage offers from Norwegian banks swiftly and safely.

Typically, switching can involve a few steps. The first step is completing a non-binding loan application. The bank will then request access to financial data from the Norwegian Tax Administration. After that an advisor will contact you with an offer. You can take this offer to your current bank as a negotiating tool or commit to the move. 

The new mortgage provider will then cover most of the leg work. 

What are the potential benefits of moving your mortgage?

While loyalty to one's bank may seem prudent, it might not always be the most financially profitable decision.

Nothing's stopping you from having a mortgage with one bank while maintaining a savings account with another. The bank you choose to switch to typically handles most of the transition process, making it hassle-free.

Many people are unaware that their bank may have increased their interest rates over time, and long-standing customers often find themselves paying higher rates compared to new customers. Therefore, loyalty to a bank may not pay off in the long run, particularly in the context of mortgages.

READ MORE: Are Norway's mortgage requirements different for foreign residents?

Shop around for banks offering the best terms for each financial service you use: by regularly evaluating the market, you can potentially save tens of thousands of kroner annually.

Even a slight reduction in interest rates can translate to significant savings over the mortgage's lifespan.

For instance, a 0.5 percent decrease in interest rates on a two-million-krone mortgage could result in savings of 10,000 kroner annually. Over a typical mortgage term, this could amount to savings of up to 250,000 kroner.

Associated costs

While moving a mortgage can yield significant benefits, particularly when considering the cumulative costs over the loan's term, it's also important to factor in various expenses associated with the transfer.

These costs typically include an establishment fee for the new mortgage, registration expenses (these two are mandatory), and the optional cost of getting a new valuation for the property.

Getting a new valuation can be financially rewarding, as it reflects any increase in the property's value over time.

This increased value provides the bank with greater security when issuing a new mortgage, potentially resulting in an offer with more favourable terms, as a lower loan-to-value ratio often translates to better interest rates on the new mortgage.