Norges Bank announces that more may be collected – NRK Vestland

Norges Bank raised its key interest rate by a new 0.25 percentage point. They themselves mention this in a press release.

They also expect another rate hike in December, despite the fact that many economists expected Thursday’s rate hike to be the last for a long time.

This increase makes it more expensive for most people with loans.

This is because the official interest rate usually affects how much money banks have to lend to ordinary people. When the prime interest rate rises, lenders have to pay more.

Central Bank Deputy Governor Pal Lungva answered questions about the development at a press conference on Thursday morning.

– There are rapid and unexpected increases in prices, especially for people with low and few incomes. Our mission is to reduce inflation.

– We have raised the interest rate a lot in a short time, and we are now incredibly close to the level necessary to bring price growth to the target.

Prices are now lower, but still “well above the target” of 2 percent, Lungva says.

– There will likely be a need to keep interest rates high for some time to come, he says, and he says the current situation means interest rates will likely remain at 4.5 “until next year.”

– Monetary policy reversal

Norges Eigedomsmeklarforbund (NEF) is “concerned” about how interest rates will develop, writes Managing Director Karl O. Giving in an email to NRK.

Last fall there was a rare reversal in monetary policy when the central bank realized that its key interest rate had remained low for too long. The site was set up in record speed.

– This policy is about to have a much bigger hit on residential investments than expected.

Giving says they’re particularly concerned about residential investment, which “hasn’t gone down much since the 1990s.”

– This will have progressively more negative impacts on the housing industry as capacity and experience weaken, and will affect the future supply of housing for a growing population.

Nouris Bank Monetary Policy Director Ole Christian Beke-Moen says they expect investment in housing to rebound in the long term.

-We believe that housing investment will decline somewhat more than we saw in the previous report and then come back again a little later.

This is “partly due to the response of housing construction, i.e. the supply side,” he says.

It warns of interest rates on housing loans of up to 6.5 percent

Carsten Henrik Biehl is Director of Consumer and Communications at Huseierne. He says they were expecting this rise in interest rates, but it was not “welcome.”

– Throughout the year, Norwegian households experienced a steady and strong increase in costs through rising interest rates, a sharp increase in municipal taxes, rising electricity prices and generally rising prices.

-With this interest rate increase, the mortgage interest rate will exceed 6 percent for most customers. Some will face mortgage interest rates of up to 6.5 percent.

He adds that this increase will likely not be noticed until November, because banks have six weeks notice before they decide to raise interest rates.

Applicants with a home loan are considering changing banks or “bargaining down the interest rate” by half a percentage point. Bell believes you can then save for two jumps in interest rates.

But the best mortgage interest rates will still exceed 5 percent.

An evening flight can cost a thousand kroner

– I first saw these cars here in the Fast and Furious movies, when Paul Walker, who is now dead, was driving around in them.

Alexander Ona Bowen (19) bought and sold various mopeds, motorcycles and cars to earn enough money to get a car loan.

NRK tells about his childhood dream from the driver’s seat of his Nissan GT-R, on the way from Lajunen to central Bergen.

It is a 2010 model, canary yellow in color, and its price is about 600 thousand with the destroyed gearbox.

He says a normal evening flight often costs SEK 1,000.

-I don’t have an account of the amount I spent on him. it’s scary.

– I’d rather not know that either, for my part. Then I think I wouldn’t feel good about myself.

There is no general overview of how many people have high car loans in Norway. But the indicator is the number of cars that were forcibly sold.

This was up 130 percent in the first half of 2023 compared to the same period last year. The bailiff in Bergen believes that the increase is related to the fact that the interest rate has become higher.

More trouble repaying the loan

Bergen City Judge Lilian Borg Bersas also noted that the number of prisoners in prisons is increasing significantly, especially among young people.

– Many people have a very close relationship with their car. Especially those who bought these expensive cars. It is a status symbol for many. It’s a way to project oneself into your environment, she tells NRK.

– Then there are many people who saved money to buy it, and were finally able to do so and get this loan. Then they are suddenly taken away again.

Ona-Buen has taken out a car loan worth £220,000, which he thinks is a good idea to repay using his equity.

But he has several friends with higher debts, and knows some “who buy cars so expensive they can’t drive them.”

– It probably had a lot to do with the fact that they thought they could afford it better, and that things would turn out better than they actually did.