This fall will bring what can be called a perfect storm for Norwegians’ private finances. Norges Bank announces further interest rate hikes and electricity prices have skyrocketed and are likely heading for heaven.
In addition, some food products are seeing increases due to the extraordinary situation. Fuel prices have recently been in yo-yo mode, and the price of diesel surpassed NOK 28 this summer.
More mortgage options
Danske Bank press officer Øystein Schmidt tells Nettavisen that the bank has noticed the public’s concern for personal finances.
– There is no doubt that Ola and Kari Nordmann are really starting to notice that the money in their wallets is not enough to the extent that they did relatively recently. Juicy electricity prices, rising interest rates, inflation, and generally higher price levels for most things mean that most people’s finances have become, and likely will, generally tighter. in the future.
Inquiries to the customer center cover mortgage-related issues and three core themes: Afreedom of payment, longer repayment period and fixed interest rate.
– Regarding the first two, freedom of installments and upward adjustment of the repayment period, we have recently seen an increase of more than 50 percent in relation to the number of people contacting us in relation to this, Schmidt tells Nettavisen.
– The reason customers typically claim is a rise in electricity prices, rising interest rates, and a general rise in costs, and some of those we are talking to now want the loan term to be fixed at 30 years, which is our maximum repayment term, Schmidt tells Nettavisen.
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Stream to the call center at some point
Many also require fixed interest rates.
– Linked to fixed interest rates, throughout the unusually low interest rate period we saw that the number of inquiries to us about it was very limited. However, this picture has changed in recent months, probably largely due to the fact that Norges Bank has raised the interest rate on several occasions, as well as the message that it is likely to increase further in the future.
– Our customer center has seen a clear increase in interest from customers wondering if fixed rate loans might be best for them, as some are now tying their interest rates as well.
The same trend has also been observed in the last two periods when Norges Bank hit with interest rate hikes.
– If you look at the period between autumn 2018 and spring 2019, when Norges Bank raised the interest rate on several occasions, our advisors experienced something similar and therefore we saw an ever smaller influx of clients who wanted advice on fixed interest rates. On these occasions, we have seen that demand and pressure were greatest in the hours and days immediately following the central bank’s hike in the benchmark rate. Let’s see the same pattern now, he points out.
However, this too shows a positive trend.
– In general, it can still be said that the vast majority of Norwegians have good control over their finances, despite their financial situation having recently become more strained. At the same time, we know that some people are already starting to feel their wallets are too thin.
Living on the edge
At the same time, the big bank notes that concerns are present.
– A survey YouGov recently conducted on our behalf at Danske Bank showed that one in ten respondents say they cannot afford to pay interest and loan repayments if the interest rate rises to four percent. Furthermore, 300,000 Norwegians said in the same survey that they would have to sell their home or other larger assets such as a car, boat, cottage if the interest rate increased to the aforementioned level.
For most of the interviewees, the situation was dramatic.
– 20 percent of respondents said they live on the brink of what their finances can handle. This agrees well with Statistics Norway’s recently presented Poverty Problems for 2021 Living Conditions Survey, which showed, among other things, that more than 900,000 Norwegians do not have the opportunity to manage an expense. contingency of NOK 19,000.
Read also: Norwegians cannot tolerate interest rate shocks: 300,000 fear they will have to sell their home
Priorities are needed
The press officer believes one thing is certain. Norwegians must now prioritize and consider more what is needed.
– You have to ask yourself the question “what is more important to me and to mine that we spend our money on” even more often than before. Our call is for you to get good old-fashioned family advice in the near future, or sit alone, where you set a classic budget and get as complete a picture as possible of how the economy wants and should look in the future.
– It will be able to save many people from a lot of worries and frustrations in the coming months. The last thing you want here is to get out of balance and, for example, rely more on credit cards to make ends meet month after month.
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