Father of two Andreas Barlow (52) saved 25,000 kronor a year when he transferred the mortgage to a new bank. – There is no reason to blindly accept the bank’s request to raise mortgage rates, the Consumer Council believes.
My experience, after 19 years as a bank customer with a mortgage, is that banks are greedy and don’t think about the customer’s best interest, says Andreas Barlow (52).
When he bought the house in Grefsen in Oslo for NOK 3.4 million in 2006 – and became a “debt millionaire,” as he calls it – Barlow used a middleman to get the best possible loan terms. Since then, he has been constantly “shopping” to ensure the best possible conditions.
Barlow says he transferred the mortgage seven times.
– The last time you cut the interest rate by 0.6 percent. It is actually 25,000 kr per year after tax. He says it’s actually a Southern holiday every year.
– You are happy to get a good offer when you enter as a customer, but the following year, the interest rate was raised by several percent. The 52-year-old adds that it’s boring to always have to argue about the best possible conditions, knowing that banks are making a fortune from retail customers.
We expect home prices to rise by 5.5 percent this year
– Banks have adventurous margins
Experts agree mortgage rates will rise across all banks, after raising the key rate to 1.25 percent on Thursday – the biggest jump in interest rates in more than 20 years.
In its monetary policy report, Norges Bank estimates that mortgage rates will peak at around 4.3 percent in 2024, in line with rising interest rates, before gradually starting to decline.
Since Thursday’s rate decision, expert after expert has encouraged clients of Norwegian banks to look closely at their mortgage loans and seek the best possible conditions. Jorge Jensen, topic manager at the Consumer Council, agrees with the message.
Many consumers in mortgage loans pay far more than they need to. It’s important to act at a time when food, electricity and fuel prices are becoming more expensive — and price growth only appears to be continuing, he says.
“Norwegian banks have adventurous margins and almost no losses on mortgages, so there is no reason to blindly accept the rate increases that banks are now asking for,” Jensen continues.
It is believed that many people forget that mortgages are individually priced.
Not discussing the rate with the bank is the biggest risk of getting a bad deal, says the manager.
were union interest rates
Andreas Barlow says he gets offers from rival banks, and puts them against each other, when he has to negotiate for better terms. Refers to a story that might be useful.
– When the wife became a member of the Syndicate of Samfunnsviterne, she was offered a mortgage rate that was supposed to be large. I called the bank and said I wanted the same incredibly good interest rate her union could offer. They replied, “You already have.”
– It is clear that I have argued with them so much that I already have the same terms that this great union has negotiated thus far. It was only at that time that I was very happy with myself, he says.
DNB consumer economist Silje Sandmæl and chief economist at the forecast center Nejra Macic also offered advice on How to initiate negotiations with the bankwhen they answered questions from E24 readers after Thursday’s monetary policy meeting.
Jorge Jensen of the Norwegian Consumer Council recommends that consumers use Finansportalen.no, an online service where Norwegian consumers can see which banks have the cheapest home loans.
– With Finansportalen.no, you are better prepared to understand whether the bank is giving you a good or bad offer. Jensen says the advantage of Finansportalen over other similar online solutions is that all Norwegian banks are obligated to report their indicative rates there.
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Ask customers to use market competition
E24 has submitted the criticism and allegation of greed to banking interest group Finans Norge.
There is fierce competition in the Norwegian mortgage market with 130 banks competing daily to give the best possible offer to customers. It is important for clients to be active and to use the competition in the marketplace, answers Svenong Sler, Director of Communications for Banking and Capital Markets at the institution, in an email to E24.
– In the event of changes to the Norges Bank’s prime rate, banks will adjust mortgage rates to take into account changing market rates, Sler writes.
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