The banks have earned large sums by increasing the interest rate faster on the mortgage than the customer’s savings account. In November, bank interest rates continued to rise, but the gap between the interest rate on the savings account and the mortgage continued, new statistics from Statistics Norway (SSB) show: The mortgage interest rate increased on average by 0 .21 percentage points to 5.68 percent. The interest on the savings accounts increased on average by 0.17 percentage points to 2.78 per cent, the statistics show. The interest on the savings in the savings account is therefore less than half of the interest the customer must pay on the mortgage. – Statistics Norway’s figures confirm what the Consumer Council has seen in recent years. Banks increase lending rates quickly, but take a long time to raise deposit rates, says consumer policy director Fredrik Färber at the Consumer Council. FOLLOW: Fredrik Färber, director of consumer policy at the Consumer Council, says that as a consumer you pay extra attention. – If you have a buffer or savings account, you do not always get the benefit of rising interest rates. That is why it is now important to check what kind of interest you have on both the loan and the buffer or savings account, he says. He believes the gap shows that customers can miss out on benefits with the bank if they are not careful. – It is clearly a challenge that we as customers have to pressure the banks to give us a better interest rate. Enormous differences in interest rates between the banks The deposit interest rate at the banks can vary wildly. On most current accounts, the interest rate is 0 per cent, but a good savings account can give customers an interest rate of 5 per cent, according to Finans Norge. – A quick search today shows that the best interest rates on deposits are around 5 per cent. It is startlingly good when the lending rate is from 5.3 per cent, says Tom Staavi, director of information at Finans Norge. Director of consumer policy, Fredrik Färber, at the Consumer Council says that even though the cost of living is increasing and interest rates are at a record high, Norwegians have savings. – In more expensive times like now, there is a good reason why we as consumers pay extra attention to the interest we have on both loans and deposits, says Färber. Both the Consumer Council and Finans Norge have an overview of the level of interest rates in Norwegian banks. – Our advice is to call or send an e-mail to your bank if your bank is far down on the list. Often they will give better interest rates to customers who make contact, says Färber. Profits for the banking industry Banks borrow money from, among others, Norges Bank. They have raised the key interest rate sharply in recent years, so that the banks have to pay more to get hold of money. But the banks pay customers far worse for their savings. Most current accounts also have no interest at all. This means that the banks get hold of money cheaply, and lend money for housing at an interest rate twice as high as on savings accounts on average. The difference between interest on housing and savings has produced huge profits in the banking industry last year. Policy rate in percent The policy rate is set eight times a year by Norges Bank. The policy interest rate governs the interest rates in the banks, and affects your housing costs. The aim of raising the interest rate is for the high prices to come down again. The forecast tells us how Norges Bank thinks interest rates will develop in the future. Read more about sources and reservations here. A higher policy rate means increased expenses if you have a mortgage – The banks’ profitability is currently good The banks have increased their earnings tremendously after the interest rate rise started by Norges Bank in 2021. The reason is that the difference between the mortgage interest rate and the interest the customers receive has increased sharply. PROFITABILITY: Director of Information at Finans Norge, Tom Staavi, says that the banks’ profitability is currently good. Photo: Kilian Munch / Press image The banks therefore take more money from customers in interest than they give to customers who deposit money in the bank. – The banks’ profitability is currently good, but it varies with developments in the Norwegian and international economy. During the pandemic, profitability was weaker. In the long term, the banks’ profitability is on a par with the profitability of ordinary companies, says Director of Information at Finans Norway, Tom Staavi. Interest calculator The calculator uses the formula for annuity loans to calculate your monthly costs. Nominal interest is used here. This means that there will be an additional transaction fee which will vary from bank to bank. Today’s interest rate is taken from DNB’s mortgage interest rate for young people, and different banks will have different interest rates. The figures given here will therefore be approximate for you. Monthly expenses are interest and repayments combined. Read more about sources and reservations here. See how much you have to pay if the interest rate increases. Do you think the banks don’t need people’s money like before Deposit rates are one of the reasons why banks have earned more than they usually do through 2023, and not lending rates, according to Staavi. – In other words: Those with good finances and bank deposits have received a smaller interest rate increase on their savings than what follows from the rise in interest rates from Norges Bank, he says. Staavi says there is a twofold explanation for this. The first is that high savings during the pandemic meant that the banks had large deposits when Norges Bank started raising interest rates to fight inflation. The second part of the explanation is that then the demand for loans also fell. – The combination means that the banks need to attract deposits to a lesser extent in order to have money that they can lend. As a result, they do not increase interest rates on deposits as much as they would if the need for deposits was greater, says Staavi.
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– Challenge that we as customers have to pressure the banks – news Norway – Overview of news from different parts of the country
