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Norway’s largest bank, DNB, announced on Friday that it is raising the interest rate on its mortgages by up to 0.25 percentage points.
The message comes after that Earlier on Thursday, Norges Bank raised its key interest rate to 0.25 per cent. This is the first time the interest rate has been raised, since the central bank lowered it to a historic zero in May 2020. The record low interest rate was introduced as a measure to maintain activity in the Norwegian economy during the pandemic.
– We are moving towards normalization
– When Norges Bank now raises the key interest rate, we are leaving a historic period of zero interest rates behind us. We are moving towards normalization. Even after this adjustment, our mortgage customers will still have a very low interest rate, says Ingjerd Blekeli Spiten, Executive Vice President for Retail in DNB.
The zero interest rate has made mortgages cheaper and led to record levels on the Stock Exchange. It has also contributed to the rising house prices during the pandemic. An increased key interest rate has been described as a sign of health for the economy.
Shortly after DNB announced that they were raising interest rates, Sparebank 1 SMN announced that they were raising interest rates on loans and deposits by up to 0.25 percentage points.
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– Norges Bank has long announced that the key policy rate will rise from a historically low level, so this adjustment does not come as a surprise. The interest rate increase is a signal that the economy is doing better for both people and companies, says Nelly Maske, Executive Vice President for Private Markets in Sparebank 1 SMN.
On Friday afternoon, Nordea and Danske Bank announce that they will also do the same.
– In light of Norges Bank’s decision to raise the key interest rate at an interest rate meeting on 23 September and developments in money market interest rates, Nordea has decided to adjust interest rates on mortgages and savings accounts, says Randi Marjamaa, head of the retail market at Nordea Norway.
– That interest rates are rising is in itself a sign that we are on our way out of a very demanding situation, where the pandemic has affected our lives and the Norwegian economy, she continues.
Danske Bank increases the lending rate by up to 0.30 percentage points.
– When Norges Bank raises the key interest rate, we must take into account the changes this entails and adapt to the market situation. With this interest rate adjustment will remain very competitive in the market. This is something we will continue with, says head of retail in Danske Bank Norway, Aleksander Dahl.
Expected by analysts
DNB states that all customers who receive an interest rate change will receive information in the online bank or receive a letter in the mail about how this affects them. New interest rates apply from 28 September for new customers, and from 12 November for existing customers.
That DNB should be quick to raise the mortgage rate by 0.25 percentage points is in line with what analysts expected in advance.
– DNB will probably be the first to raise interest rates. Then comes the savings banks. It probably does not take many days before it happens, said head of analysis Johan Ström in Carnegie to DN on Thursday. (Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We want you to share our cases using a link, which leads directly to our pages. Copying or other use of all or part of the content may only take place with written permission or as permitted by law. For additional terms look here.
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