Interest rate may
go above 8%
 Lisbeth Tharaldsen fears a new interest rate increase, even if she could manage to pay more. PHOTO: SVEIN ERIK FURULUND |
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Unrest in the US markets is putting upward pressure on interest rates in Norway.
"If the uncertainty in the financial markets continues, the costs the banks face, will increase further. The lending rate will climb without Gjedrem (the head of the Bank of Norway) doing anything. Money will cost more and borrowers will have to pay more," says economic analyst Pål Ringholm.
"If unrest in the markets continues, new house loans may cost over 8 percent. This reflects what banks have to pay for the money they themselves borrow," says Ringholm.
Fixed-interest loans are less popular than loans with a variable interest, which follow market fluctuations.
"Some 7 percent of the house loans in our bank have fixed interest rates," says information director Aud-Helen Rasmussen at DnB NOR bank.
Until 15 years ago, few banks offered fixed-interest loans to home owners. Today only a few banks let borrowers fix interests for more than ten years.
Currently a 10-year fixed-interest house loan cost approximately 1 percent less than a standard loan with fluctuating interest.
Sven Goll
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