Interest, Storebrand | NOK 800,000: We cannot afford today's level of interest rates

Interest, Storebrand |  NOK 800,000: We cannot afford today's level of interest rates

Interest rates are now much higher than experts expected.

We wouldn't be back for more than a year and a half before Bank of Norway I didn't think the interest rate would be higher than 3 percent. Now the rate is 4.5 percent, and they announced that it will remain at this level for a long time. Norges Bank's next interest rate meeting will be held on Friday.

Fewer economists believe there will be a rate cut at all this year, and Handelsbanken even hinted at the possibility of a rate hike.

Read also: Storbank: – The interest rate probably will not be cut this year

Norwegians are at the limit of their endurance

In a new YouGov poll for Storebrand, it appears that many Norwegians have now reached their tolerance limit.

19 percent – 800,000 Norwegians – answer no to the question of whether their economy will withstand the current interest rate level in the long term.

Four percent – 158,000 people – say the situation is now so bad that they are considering selling their homes.

The numbers agree well with a recent report which showed that nearly 1 million Norwegians would be unable to afford an additional unexpected expense of NOK 20,000 without taking out a loan.

Read also: Dramatic Norwegian Statistics report: 970,000 Norwegians have reached this point

And if interest rates rise, it will be even worse: 4 in 10 say they would be “quite” or “very” worried about their finances if mortgage interest rates reached around 6 per cent during the year.

For most people, this practically means one or two interest rate increases.

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Read also: Norway statistics: Banks increase mortgage margins

Bigger differences

At the same time that many are now saying they have reached a tolerance limit, new statistics show that at the same time a lot of money is flowing into the funds market.

According to the numbers from Verdipapirfondenes Association So far this year, Norwegians have invested NOK 12.6 billion in funds (net of deposits). The vast majority are mutual funds.

– We have long seen a divide in Norwegian business life – with some companies doing very well, while others are struggling. Now we're seeing the same development among individuals, says savings expert Fredrik Gregorsson of Storebrand.

The bright spot for those who are suffering is that the salary settlement looks good this year. To date, wage settlement has increased wages by more than 5 percent for large groups in society. For the first time in many years, wage settlement can provide increased purchasing power, since the general price level in society does not rise more than wage growth.

At the same time, she points out that many people gain extra money in a short time:

– According to the Swedish Tax Agency, 2.7 million Norwegians are likely to receive money from their taxes. If you are among them, take the opportunity to set aside money either in a savings account or a fund. The same advice applies if you're anticipating some “extra” vacation money in June.

Dalila Awolowo

Dalila Awolowo

"Explorer. Unapologetic entrepreneur. Alcohol fanatic. Certified writer. Wannabe tv evangelist. Twitter fanatic. Student. Web scholar. Travel buff."

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