Today, interest rates increased by 0.5 percentage points, as many economists had predicted in advance. Several economists have believed that if inflation is to decrease and the Norwegian krone is to strengthen, the interest rate must rise by as much. After today’s interest rate hike, the krona has strengthened strongly. The increase means that people with mortgages will have to pay more each month. And the bigger the loan, the worse it gets. For Camilla Holmen (24) and Jan Frode Hansen (33) in Alta, today’s news means that they will have to fork out NOK 26,800 per month for the mortgage of five million. That is almost NOK 10,000 more a month than what they paid two years ago. – I hope it ends very soon. That the interest rate will not rise any more now. In the last two years, the income of NOK 8,800 that we get from the rental part of the house has been eaten up by the interest rate increase, says Holmen. Camilla Holmen and Jan Frode Hansen hope the interest rate ceiling has been reached. Photo: Kristian Sønvisen Bye / news – Not gone without renting The married couple own a home in a hot housing market. Only beaten by the biggest cities in Norway. Despite the interest rate increases in the past two years, house prices in Finnmark’s largest city have only continued to rise. This is confirmed by bank manager at DNB Alta, Bjørn Helge Andreassen. – The market in Alta is very hot. From 2021 to 2022, prices increased by 8 percent. It is extremely high, says Andreassen. The house was bought two years ago for just over 7 million. Now Jan Frode Hansen and Camilla Holmen will sell for 7.4 million. If the market will pay. Photo: Kristian Sønvisen Bye / news Two years ago, the cohabiting couple from Alta shelled out seven million for the 190 square meter house. Now they will sell. Price tag: 7.4 million. – We need more space, says Jan Frode Hansen. The couple have a two-year-old boy, and two little twin girls were born four months ago. If they are to keep the same standard, they will probably have to come up with more than 7.4 million. But they will not go anything particularly higher than 8 million. Camilla Holmen and Jan Frode Hansen are looking for a bigger house. They believe they will be able to cope with today’s interest rate increase. Photo: Kristian Sønvisen Bye / news They have been part of the price increase in Alta and therefore had good equity when they bought the house two years ago. In addition, they both have permanent jobs at the concrete manufacturer Jaro. It is a sense of security, says Hansen. – For the time being, I’m taking it pretty easy, but if the rent continues to rise, you can get a little nervous. If we hadn’t had a house with a rental part, it wouldn’t have gone so well, says the father of the family. 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 2021 2022 2023 2024 2025 2026 Forecast Norges bank Paying more than the rate – I think unfortunately many people have problems getting the wheels turning, says bank manager Andreassen. He says that for a long time there has been a desire in the market for detached houses. This has led to people being willing to pay far above the assessed value for the house they want. But where the detached houses used to be torn away from the market, there is no longer a rush for viewings. Especially not on the most expensive houses. – This home has been lying around for a long time and was recently reduced from 12 million to 10 million, says the bank manager and shows a housing advertisement on his mobile phone. Bank manager at DNB in Alta, Bjørn Helge Andreassen, is excited about how home owners will cope with the interest rate increase. Photo: Hanne Larsen / news Nor has the door mat been worn by the cohabiting couple Hansen/Holmen. – We have only had one interested buyer, says Jan Frode Hansen. Higher debt than the average In Alta, the average mortgage debt is four million. This is higher than the national average. In recent years, the houses have only gotten bigger and bigger. Houses of 300 square meters are a common sight, and today houses of nearly 400 square meters are being built in the city. The homes in Alta are only getting bigger and bigger. Houses of 300 square meters are quite common. Photo: Kai Erik Bull / news In addition, most people have two cars, many Altaværings also have snowmobiles, four-wheelers and caravans. – I honestly don’t understand how everyone manages it. If interest rates continue to rise, it could probably be a good thing, says Hansen. – Do you think that there is more vacillation in many people than one can get the impression? – I think that applies to a great many households today. The facade is very nice, but then it is very shabby inside, says the 33-year-old. Jan Frode Hansen believes that many people have a nice facade, but at the same time struggle to make ends meet. Photo: Kristian Sønvisen Bye / news Alta has a young population and a high proportion of people employed in private business. Close to 70 percent. Unemployment is low. – Alta is an attractive place, with high activity, to which many people want to move. Combined with a slight shortage of housing, this drives prices up, says the bank manager. – We are in a borderland But as we know, no tree grows into the sky. The bank manager is concerned that many people are sitting on large loans, while at the same time they have to continue the same consumption as before. So far, he has not seen any sales boom, nor significantly more forced sales than before. But this could be a house of cards that could quickly burst, he believes. He says that this particularly applies to those who may have overpaid for the house and suddenly have to sell for far below what they paid. – Then we are approaching what we call a housing crash. But fortunately we are not there today, and we hope that we will not get there. But we are in a border country, if people do not take the necessary measures, says Andreassen. – Have the banks been too sloppy in handing out money to young people who have no experience with interest? – I think we are well within the law and regulations, but then there is what the customers do with the advice they get from the bank. That is probably where much of the answer lies, believes Andreassen. Jan Frode Hansen is at home for lunch and greets his partner Camilla Holmen and the twins Antone and Alma, almost five months old. Big brother Odin is in kindergarten. Photo: Kristian Sønvisen Bye / news Interest calculator The calculator uses an annuity loan formula 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.
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Five million in loans despite – new interest rate increase does not make Camilla and Jan Frode sleepless – news Troms and Finnmark
