, but not everyone gets the same cuts: – Call your bank
According to the latest data, interest rates on mortgage loans remained at historically low levels in January. However, new loans have, on average, better interest rates than the old ones. This means that not all clients receive equal interest rate cuts, says NBBL's chief economist.
Latest data from Norwegian Office Statistical show that mortgage interest rates continued to decline in January.
For mortgage loans overall, the interest rates were at the lowest levels ever recorded by the Statistics Norway in its monthly statistics. It comes from December 2013.
For new floating rate mortgage loans, the average interest rate was 1,77%.
Existing variable rate mortgages averaged 1,83 percent, 0,02 percentage points less than in December.
The difference of 0,06 percentage points shows that not all clients receive the same reduction in mortgage rates, says chief economist Christian Frengstad Bjerknes of the Norwegian Housing Association (NBBL).
- It's a bit of a standard that when the interest rate drops, the interest rate does not fall the same for everyone.
- Call the bank
Bjerknes believes that passive customers are often the ones who pay the most.
- If you do not actually call your bank and use the usual arguments, you will probably pay a little more for the loan than your neighbor.
“This is average, meaning some are well below and some are way above. If you are significantly above, you should definitely contact your bank.
Record low interest rates
The background for low interest rates is the historically low key interest rate, which is still zero percent. This has been the case since May last year.
At that time, Norges Bank was estimating mortgage rates at nearly 1,75 percent in the years to come. However, the economic picture and interest rate outlook have changed since then, notes Bjerknes:
- At that time, Norges Bank said that the interest rate should be zero throughout the forecast period. The current forecast assumes an interest rate hike in March 2022.
The background to the acceleration is the improvement of both the Norwegian and world economies, he says.
- There was also a strong stimulus from the public authorities, and many of us have not received a worse offer because we cannot spend the money as before, says Bjerknes.
Lower levels expected
"Mortgage rates in Norway are at a historically low level," said Norges Bank in its previous December monetary policy report.
At that time, the central bank expected the interest rate mortgage loans will remain more or less unchanged in the "near future".
"Over the longer term, we assume that mortgage rates will decline slightly further, in part as a result of refinancing existing mortgages at lower interest rates," he says.
The next decision on interest rates will be made on March 18, along with a new monetary policy report with new estimates.
