Banks announce sharp increase in interest rates

Money fixed interestNorwegian bank notes, Photo: Norway Today Media

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In the first quarter of this year, interest rates on mortgages were increased by the banks. The strongest interest rate increase for several years is now being announced for the second quarter.

This was shown in a loan survey conducted by Norges Bank on Thursday wrote Dagens Næringsliv newspaper.

The interest rate rise was caused because Norges Bank has set the interest rate twice in the past six months, first in September last year, and then again in March this year.

Over the next few months, as the banks have to wait six weeks from the announcement of the rise to existing borrowers, most will not notice it before April.

Chief economist, Kari Due-Andresen of Handelsbanken Capital Markets believes that few people have yet felt the upswing as a disadvantage, and that the interest rate increase has been dampening the housing market.

‘’The interest rate rise has already shown affects in the housing market. Just that the interest rate is not falling anymore is a slowing affect in itself’’ said Due-Andresen.

Most will get an interest rate on their home loan of between 2.5 and 3.0%, but the best loan customers could get lower interest rates. Norges Bank have estimated that the mortgage rate will rise to around 3.5% over the next three years.

© NTB Scanpix / #Norway Today

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