August 11, 2022

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Banks raise mortgage rates after Norges Bank interest rates jump - E24

Banks raise mortgage rates after Norges Bank interest rates jump – E24

DNB became the first major bank to raise mortgage rates after Norges Bank’s interest rate meeting.

DNB CEO Kjerstin Braathen.

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The DNB decided to raise the interest rate on mortgages by up to 0.25 percentage points. This happens after the Norges Bank raised its key interest rate of 0.5% on Thursday.

The new interest rates apply from December 18 for new DNB customers, and from January 28, 2022 for existing customers, the bank mentions in the exchange issue. All customers who receive a change in the interest rate will receive information in the online bank or receive a letter in the mail about how this affects them.

DNB’s Director of Communications, Vibeke Hansen Lewin, told E24 that the bank is also raising the deposit rate by up to 0.25 percentage points for customers with deposits in the Boligspar Ekstra account type.

For a standard savings account, Sparekonto Pluss and BSU, the deposit rate is raised by 0.10 percentage points. It also includes fixed interest deposits.

New deposit rates apply from the same date as the mortgage rates, as stipulated by the DNB.

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Nordea follows suit

Nordea also raises mortgage rates by up to 0.25 percentage points.

New interest rates will apply to existing loans from January 28, 2022, for new loans, interest rates will be applied from December 20.

On the deposit side, interest rates on the account type of Extra savings account will be raised by 0.25 percentage points, according to Nordea.

Nordea’s director of communications, Christian Stephensen, said the bank will provide more information on interest rates on other deposit accounts “in a short time”.

Start raising interest rates

Fana Sparebank became the first bank to raise interest rates after Norges Bank’s rate adjustment.

Sparebanken Vest also reported on Friday afternoon to raise deposit and lending rates by up to 0.25 percentage points.

Sparebank 1 Østfold Akershus is also raising the interest rate on loans for private and corporate markets by up to 0.25 percentage points. At the same time, the bank raises the deposit rate by up to 0.15 percentage points.

SpareBank 1 SR-Bank also reported that mortgage interest rates will be raised by up to 0.25 percentage points.

The DNB was previously the first to look for the last three rate hikes, and rate adjustments at other banks often come quickly after that.

After the Norges Bank raised its interest rate from a record low of zero percent in October, banks raised the lending rate more than the deposit rate.

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Fana Sparebank raises mortgage rates

Interest cost increases 2500 per million

For every percentage point that the interest rate on your bank loan increases, your annual interest costs will increase by NOK 10,000 for every million you have in a loan.

If banks follow Norges Bank and increase interest rates for loan customers by 0.25 percentage points, your annual interest costs will increase by 2,500 NOK for every million you have in loans.

Thus, a 3 million NOK loan would get 7,500 NOK in increased interest costs annually, not including tax cuts. Including tax deductions, the increased interest cost will be NOK 5,840.

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This means an increase in the interest rate for you

It was answered at that time

Norges raised the interest rate from zero in September and after Thursday’s hike, the key rate is 0.5 percent.

There is a great deal of uncertainty about the future course of the epidemic and its effects on the economy. But if economic development is about what we imagine now, interest rates will likely rise further in March, said Central Bank Governor Oustin Olsen.

Many senior economists reacted at the time of the Norges Bank rate hike. It comes at the same time that the omicron variant of the coronavirus is creating uncertainty for parts of the Norwegian economy.

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