Home loans in Norway will soon become more expensive

Kroner - euro - dollarPhoto: Jon Olav Nesvold / NTB

On Thursday, Norges Bank raised the key interest rate – by 0.25%. 

Professor Ola Grytten at the Bergen School of Business estimates that the key interest rate will rise to 1.25% and that the current home loan interest rate will be around 3% by the end of 2022.

The Homeowners organization believes that consumers have little to worry about after Thursday’s interest rate increase. For a regular loan of NOK 2 million, the expenses will increase by about NOK 300 a month, or almost NOK 4,000 a year, according to the organization.

“The interest rate increase in the next year is what should worry us more. A 1% increased interest rate will give around NOK 15,000 in increased loan expenses if you have a regular loan of NOK 2 million,” the organization’s consumer and communications manager Carsten Henrik Pihl stated.

Continued uncertainty

In an explanatory memorandum, Norges Bank writes that the interest rates are likely to increase gradually over the next few years. 

“As we now assess the outlook and the risk picture, the key policy rate will most likely be raised further in December,” Governor Øystein Olsen stated.

The Interest Rate Committee pointed out that there is still uncertainty about the further course of the pandemic and that new virus variants may slow down the economic recovery. 

At the same time, there is still a risk that the pandemic will have long-term consequences for employment.

Source: © NTB Scanpix / #Norway Today / #NorwayTodayFinance

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