Mortgage interest rates are at their highest since 2014, according to Statistics Norway. It has soared this year after being at very low levels during the pandemic when the key interest rate was zero. In October, the interest rate on new mortgages was an average of 3.66 per cent. But because there is 6 weeks’ notice of interest rate jumps, many have recently received notice of further interest rate increases. EXPENSIVE LOANS: Mortgage interest rates have skyrocketed this year and are at their highest in eight years, according to Statistics Norway. Photo: Anett Johansen Espeland / news And Norges Bank will probably raise interest rates by a quarter of a percentage point in December, but it could be more. Record low unemployment Today, NAV came out with new unemployment figures for November which show that 45,400 people are completely unemployed. The record low unemployment rate of 1.6 percent is the best indicator that the Norwegian economy is still doing well, according to the big bank Nordea. – Low unemployment in addition to high wage increases means that Norges Bank must consider increasing the policy rate beyond what they have already signalled, says chief economist Kjetil Olsen at Nordea. HIGHER INTEREST RATE: The low unemployment rate and high salary supplements may mean that Norges Bank will go to even higher interest rates, says Nordea’s chief economist. Photo: news He believes in three interest rate jumps of another quarter of a percentage point, so that Norges Bank’s policy rate will be 3.25 per cent next year. – Mortgage customers have to be prepared to pay 4.5 per cent in interest during the winter and spring, says Olsen. Must cool down the economy DNB’s chief economist Kjersti Haugland also states that the Norwegian economy is doing better than Norges Bank has expected in the latest Monetary Policy Report. Together with the skyrocketing price increase, it indicates in isolation that Norges Bank’s board is considering a double interest rate jump in December. But Haugland nevertheless concludes that they are content with “a quarter” and that the policy rate will peak at 3.25 per cent in March next year. NORWEGIAN ECONOMY GOOD: Low unemployment and high inflation mean that Norges Bank will increase the policy rate to 3.25% in March next year, says DnB’s chief economist Kjersti Haugland. Photo: Thomas Wi According to Renteradar, the interest costs on a mortgage of NOK 3 million will increase from NOK 6,250 a month in May this year to NOK 12,125 in May next year. So almost a doubling.
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Norwegian economy stronger than expected, may mean increased interest rates – news Norway – Overview of news from different parts of the country
