– It will not be a holiday for 10 years and we can at least not afford a new car, says Mia Benedicte Lund from Alta and laughs. The 32-year-old has together with his cohabitant Christian Reginiussen realized the dream. A 200 square meter architect-designed house, with panoramic views of forest and mountains. But today’s unusually high interest rate increase is a sliver of joy. At 10 o’clock today, Norges Bank released the news that interest rates will rise by 0.5 percentage points. – It was a lot, says Lund, when she hears the news. – I must say I was quite surprised. This is a fairly recent rise in interest rates, says economic commentator at news Cecilie Langum Becker. Three per cent in the spring The key policy rate is now 1.25 per cent. And already in August it will up to 1.5 percent. And next spring it will be up to 3 percent. Only with today’s interest rate hike, a family with a fairly “small” loan of four million will pay out NOK 1,700 more a month. For the family in Alta, there will be even more to pay. Lund admits that she is thinking about raising interest rates. – It is inevitable that you think about it. We know that this means that we have to pay more every month on the loan, says Lund. Today, she is happy that her cohabitant has held back, when she herself has wanted to go for more expensive solutions. – Yes, in retrospect I’m glad we did not take off completely. He is very careful to keep expenses down, says Lund. Although Mia Benedicte Lund and her cohabitant have a fairly large loan to service, she knows those who have more. Photo: Hanne Larsen / news And sobriety can come in handy. Today’s interest rate increase is just the beginning. The report from Norges Bank shows that already in 2023 we can end up with a housing interest rate of over 4.5 per cent. DNB CEO in Alta Bjørn Helge Andreassen is concerned. He distributes money in one of the country’s most expensive housing markets, where house prices have risen steadily over the past 25 years. With a record low mortgage rate of less than 2 per cent over several years, there has been a lending bonanza. But now he notices that more people are shaking in their trousers. – What we see is that already after the two interest rate increases this autumn, people have called us and asked for a grace period on loans. And that worries us, he says. At the same time, he reminds that a “normal interest rate” in Norway is considered to be five percent. – But people are used to very low interest rates, and we will go back quite a few years before we find an interest rate as high as four to five percent, he says. – More people should skip the holiday According to Statistics Norway, an average house, including land, costs 8.8 million to build. If the interest rate rises to 4 percent, as the bank manager predicts, a family with a mortgage of 7 million will have to pay 7,500 kroner more a month. Bank manager at DNB in Alta, Bjørn Helge Andreassen, sees that people are struggling after only two interest rate increases. Photo: Hanne Larsen / news The bank manager asks people to prioritize very hard. Do you want control of the house or do you want to spend 25,000 kroner on the holiday trip that you think you deserve, he asks rhetorically, before he answers: – More people should consider dropping the holiday this year. When people fail to pay their bills, the case ends up with the bailiff. This instance can force you to sell things you own, in the worst case your house. Then you can get a bad price and end up as a debt slave, but then without a house. – Many people live on the border of what they can tolerate and it is worrying, says the bailiff in Finnmark, Tommy Sneve. Sneve says that more people put pleasure over duty. For example, by not paying “boring” bills, but rather taking a holiday trip. – My advice is to adapt the economy to be able to withstand fluctuations in the future, he says. Uses up the buffer – This is what very few people do, says bank manager Andreassen. On the contrary, people first get mortgages, and then they use up what should have been a buffer for other things. He mentions cars, boats, snowmobiles and quad bikes. In addition, many people get a caravan or cabin. – Yes, there are people under the age of 30 who have both a house and a cabin, he says. – But how do they get loans for all this? – We lend five times the income to people, and have good limits for them to withstand an interest rate increase of 5 percent. But we want people to have their dreams come true, so we reach out, Andreassen admits. Alta municipality has a young population where many own their own detached houses. The prices here are among the most expensive in the country. Photo: Siv Johanne Suhr / Alta municipality Baker expensive loans into mortgages He says that the problem is that people break the “agreement” they have with the bank, that something should be set aside for savings. Another thing is that people refinance their loans so that they bake expensive consumer loans into the mortgage. The problem with that, the bank manager admits, is that they are sitting on an artificially large mortgage. So why do banks let this happen? – Yes, it is a relevant question about why the banks do this and why the regulations allow it. But housing growth has been stable for many years and this makes the banks feel that it is safe for people to borrow and mortgage the house, says Andreassen. , Financial commentator in news Cecilie Langum Becker, explains why interest rates are raised. If the homes fall in price, this becomes even more problematic, says the bank manager. – If you have a house worth 7 million and expect this to rise every year, then it is not certain that it will happen. If we get a rapid fall, it could be the start of a housing bubble, he says. Andreassen does not want to scare people from buying either a house or a car, but at the same time says that many benefit from a reality orientation. The home of Mia Benedicte Lund in Alta. Photo: Kai Erik Bull / news – You do not have to have everything at once and you can be happy in a smaller house. And do not look so much at what the others have. It is not certain that they themselves have paid for it, he says. Mia Benedicte Lund stands on the plate and points out where she intends to make a small strawberry stain. She is willing to take things step by step. – We have to wait with the outdoor area. It is expensive. We take one thing at a time, she says. The outdoor area will not be completely finished in the first place. – We take one thing at a time, says Mia Benedicte. Photo: Hanne Larsen / news
ttn-69
Fear interest rate increase – people with large loans and a lot of debt will struggle now that interest rates increase – news Troms and Finnmark
