– We are seeing a certain increase in the number of applications for exemption from installments. That’s what Stein Vidar Loftås says, who is executive vice president for communications, society and sustainability at Sparebank 1 Nord-Norge. DNB and Nordea also see a marked increase in applications for interest-free loans. If you are granted freedom of repayment, you only pay the costs of having a loan, and postpone the repayment of the loan itself. But it is intended as a temporary solution. – It is intended to help you overcome a temporary problem, and is given for a maximum of 6 months, says Loftås. He explains that there are people who are already in a stable financial situation, but who have a period where they need a more spacious economy that can be granted. – If you suddenly have an increased expense, for example a car repair or that you have to change a washing machine, so that you need a deferral of installments for a short period, says Loftås. And that is exactly what more people want to do now. Absolutely indispensable without One of these is Runar. He works as a project manager in the construction industry. He has a house, children, a steady job and a good economy. Runar is one of these that the banks describe, the new group that wants freedom of installments. Runar is from Tromsø, but currently lives in Bodø. Photo: Privat Before last Christmas, Runar was in a situation where he was alone with the mortgage, and received help from the bank. – Initially, it was to have a slightly more spacious economy for a period, but THEN came the interest rate increases, says Runar. After a conversation with the bank, they agreed on interest-free installments. This year’s many interest rate jumps have this helpful for the Bodøman. – Getting interest-free in the future is almost indispensable, states Runar. – Gradually, these interest rate increases began to be felt quite strongly, says Runar. He sees himself as having to keep these arrangements in the future. – At least until interest rates start to fall again, says Runar. In the economic times we are in now, it can be tight for many. Runar has taken steps to make everyday life easier. Runar is a project manager in the construction industry. He doesn’t want us to use his last name. Photo: private – Eventually you have to opt out of things. A luxury in everyday life that you don’t need, says the man from Bodø. Not everyone has the same opportunity as Runar. He is in a relatively secure financial situation, and therefore he can get interest-free payments, not everyone can. – I am very lucky, in many ways, he says. High borrowing costs Earlier in August, the central bank announced the interest rate decision. Norges Bank raises the key interest rate to 4 percent. On Monday, DNB was the first major bank to follow suit, raising interest rates by 0.25 percentage points. DNB’s chief economist, Kjersti Haugland, says that it is natural that requests for interest-free repayments increase when interest costs increase. Kjersti Haugland. Photo: Alf Simensen / news – It is one of the ways borrowers can shield themselves from the effects of higher interest rates. They can also refinance their loans and get a longer term. There are things that soften the blow that comes from higher interest rates, says Haugeland. Haugland says that loan costs are high now compared to what we have experienced for a long time. – The purpose of the interest rate hike on Norges Bank’s part is to cool down the economy so that the risk of price inflation getting stuck at a high level is reduced. There will probably also be the consequences, says Haugland and adds: – The interest cost of the people who have borrowed money rises and then there is less left over for other things. It is consumption in particular that will be dampened by a further rise in interest rates, but also demand for housing. Credit bills, break-ups and increased expenses After a long period of rising prices, increased interest and electricity expenses, Nordea has experienced that far more people are applying for interest-free repayments. – In the first half of this year, we had approximately 47 per cent more applications for repayment deferrals than in 2022. So there are clearly many people who notice that the economy is tougher. This is written by Anja Lohne Holm, who is a communications advisor at Nordea. After a long period of price growth, increased interest and electricity costs, Nordea has experienced that far more people are applying for exemption from installments. Photo: Bob Strong / Reuters – The classic reasons for an increase in repayment deferrals at this time of year are that you get the credit card bill after the holidays and that there is an increase in the number of break-ups. Holm writes to news that the increase in installment deferrals is completely normal for the season. But there is still a completely new group that applies for repayment deferrals. – These are customers who have relatively good finances and partially repaid loans. They want repayment deferrals since they notice that the costs of “everything” have increased, and they want a more spacious economy. Furthermore, Holm writes that the vast majority of people get their application approved, as they are within 60 per cent of the payment rate and otherwise have tidy finances. The situation can change – We believe that the vast majority have had fairly good buffers. People have saved up money, especially during the pandemic, and have thus had the opportunity to adjust their finances. Photo: Terje Rafaelsen – The last interest rate increase that was carried out before the summer has not yet been implemented, so it may be that the situation will look different in a while, says Loftås in Sparebank 1 Nord-Norge. Although more people have applied, Loftås believes that people have prepared for tougher economic times and saved up buffers. – Those who are starting to approach the limit of what the economy can withstand will feel this. But we see that for the vast majority it has been calculated that they will have to withstand a limit, which is higher than what we are at today, so we do not think this will have drastic consequences for the average. Very often the mortgage is the very last thing to be done about, says Loftås. – You first cut back on other and perhaps slightly more unnecessary things. You might drop luxury goods, or a planned holiday. And the last thing you do anything about is the mortgage.
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Several apply for freedom of payment from DNB, Sparebank 1 Nord-Norge and Nordea – news Nordland
