document rate It rose 0.25 percentage point to 4 percent, the Bank of Norway reports.
The further path of the interest rate will depend on economic development. If all goes as we think now, we will raise the policy rate further in September, says central bank governor Ida Woldenbasch in a statement. press release.
Early on, many economists also expected interest rates to rise.
Policy rate in percentage
The policy rate is set eight times a year by the Bank of Norway. The policy interest rate controls interest rates at banks, and affects your housing costs. The goal of raising the interest rate is to bring high prices down again.
Forecasts tell us how Norges Bank thinks interest rates will develop in the future.
Read more about resources and reservations here.
A higher interest rate means higher expenses if you have a mortgage
Bank of Norway forecasts
There are many factors that come into play when the central bank sets the interest rate. Price inflation and the krone exchange rate are two of them.
core inflationWhich gives a picture of the core price increase, it fell to 6.4 percent in July.
This is 0.1 percentage point higher than Norges’ estimate for June.
The krone is a little stronger than expected, but the overall development in the Norwegian economy has been pretty much as the central bank thought in June.
– As expected, the central bank raised the interest rate by 0.25 percentage points. What we should note in the press release is that they plan to raise the interest rate again in September, chief economist Sarah Midtgaard at Handelsbanken tells NRK shortly after the rate decision was announced.
The forecasts presented by the Bank of Norway in June indicate that the main interest rate will continue to rise. It is expected to rise during the fall to 4.25 percent.
In June, the Bank of Norway estimated that interest rates would rise again during the fourth quarter. Now they say the next rate hike is likely to come in September, and one shouldn’t rule out the possibility of another rate hike after September, she continued.
Chief Economist Sarah Middegaard at Handelsbanken.
Photo: Handelsbanken
More expensive mortgages
For Norwegians with mortgages, higher interest rates mean higher interest expenses. Midtgaard at Handelsbanken believes we will see a mortgage interest rate between 5.5 and 5.75 per cent.
– and then you start biting the wallet, and you will probably feel it in the future. It doesn’t look like interest rates are going to drop anytime soon. She says Norges wants to keep interest rates high over a longer period to make sure inflation comes down.
Interest calculator
The calculator uses the loan annuity formula to calculate monthly costs. Nominal interest is used here. This means that there will be additional transaction fees which will vary from bank to bank. Today’s interest rate is taken from the youth DNB mortgage interest rate, and different banks will have different interest rates. Thus, the numbers given here will be approximations to you. Monthly expenses are interest and repayment installments combined.
Read more about resources and reservations here.
Find out how much you would have to pay if the interest rate increased.
The chief economist believes that the interest rate will remain at a high level until the end of 2025.
– We believe that interest rates will remain at a higher level than people are used to. Late next year, in the third or fourth quarter, the Bank of Norway may cut interest rates. But it says the key interest rate will remain at a high level until 2025.
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