DNB cuts interest rates for young customers – E24

DNB cuts interest rates for young customers – E24

Bank reduces interest rate on home loans for young customers up to 34 years of age.

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– Today we sent a customer letter to all our young customers up to the age of 34 who have taken a youth home loan with us, but not a first home loan. In the letter, we informed you that we are lowering the interest rate on your mortgage to 5.49 percent, which is the same interest rate as our first home loans, says Øystein Kløvstad Langberg, Head of Communications at DNB.

Longberg says the interest rate cut goes into effect today and applies to existing and new loans.

The average interest rate cut for loans is 0.11 percent, which applies to about 19,000 DNB customers.

– We are keen to be competitive and we always try to offer good conditions compared to our competitors, says Longberg.

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Economist Haljir Kwatsheim believes this is the start of lower interest rates.

– Now DNB shouldn't get all the credit for this, because Landkreditt Bank is the one that started lowering the interest rate. But it's important when DNB does, because many banks are following what DNB is doing, Kvadsheim tells E24.

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– Should you switch banks now if you don't get a lower interest rate?

– Yes, especially if you are in the young category. But DNB's prices in the casual segment aren't particularly impressive, he says, and makes an appeal:

– If you are over 34, phone DNB and ask why you can't get a lower interest rate because your age is incorrect.

Economist Haljir Kwatsheim believes this is the beginning of lower interest rates.

Competition

When DNB opened its books for the first quarter of this year, they showed interest income falling as interest rates peaked.

DNB and other banks have raised lending rates at a rapid pace in line with Norges Bank's interest rate hikes. Banks tend to make more money when interest rates rise.

In connection with the presentation of the quarterly report, Ulrik Ardal Zurcher, an analyst at Nordea Markets, said that DNB is struggling to remain competitive.

– Then you can speculate if they have to do something with the price of mortgages, Zurcher told E24.

DNB CEO Kjerstin Braathen disagreed with the analyst, saying:

– We have repeatedly received proof that we have good prices, including a good number of overviews that you have published on E24, Bratton said in this regard.

“Good Times Are Coming”

Many banks have recently reduced interest rates. Landkreditt Bank was cut in March. Sbanken and Obos-banken, which are part of DNB, followed suit this week.

When Norges Bank raised its key interest rate for the last time before Christmas, many banks also decided to cut interest rates.

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In the face of strong price growth since the pandemic, interest rates in this country have been raised sharply in recent years. Banks have often followed suit and increased mortgage interest rates.

Norges Bank hiked interest rates further to 4.5 percent in December.
Since then, the central bank has signaled that interest rates will remain unchanged “for some time to come”. At an earlier meeting in March, central bank governor Ida Woldenbach said an interest rate cut was likely in September.

However, many experts believe that the central bank's rate cut will be postponed. The background is, among others, a weak krone exchange rate, continued high price growth and strong wage growth. Nordea Markets predicted this week that Norges Bank will not cut interest rates until 2024.

Joshi Akinjide

Joshi Akinjide

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