(Nettavisen) After two and a half years of continuous interest rate hikes, things have finally calmed down. Since the key interest rate was raised to 4.5 per cent in December 2023, it has remained in place.
While a few months ago it was predicted from several quarters that the interest rate would be lowered around the summer, today almost no one believes it.
Norges Bank has indicated that the first interest rate cut may come in the autumn. But recently there have been several signs that the interest rate cut may be postponed further. Nordea Markets recently wrote in a recent analysis that it does not think there will be an interest rate cut until 2025.
With several months since the last interest rate hike and several months until the next interest rate change, we are for the first time in a long time in a situation with a stable interest rate level.
Right now is therefore a good time to take a closer look at the housing interest rate. And new figures show that many people have a lot to save.
– Has the opportunity to go down a bit
– Now the timing is ideal. We can count on the interest rate picture we see now to remain stable for quite some time to come, says Sondre Noss, who is head of marketing for the comparison service Renteradar.
Today’s interest rate situation makes it more difficult for the banks to argue against interest rate cuts when you want to negotiate your terms, according to Noss.
– In the past, we saw that the banks often used the frequent interest rate increases as an excuse for not lowering the interest rate. When referring to other banks’ lower interest rates, it was often said that this interest rate will soon change. Now they can no longer hide behind such explanations, says Noss.
He also highlights another reason why the timing for negotiating interest rates is now particularly good.
– The banks now have an extra strong desire to keep their customers because the mortgage market is hardly growing. We have to go back to the 1990s to find lower annual mortgage growth. Credit growth has gradually decreased over the past two or three years, with fewer people taking out loans and lower house price growth. If you lose customers now, you lose market share, says Noss.
A recent lending survey from Norges Bank confirms this picture. It says that the banks have reported lower demand for mortgages in the last three quarters.
– A third reason why the timing is good is that the banks are very profitable now. They have the opportunity to lower their customers’ interest rates a little, says Noss.
– Amazing
Renteradar uses data from over 180,000 loan customers in Norway. They show that 80 per cent of mortgage customers can save money by switching to a bank with a lower interest rate, or by negotiating down the interest rate they have.
– A surprising number of people have far too high interest rates, says Noss.
He says that new users of Renteradar can save over NOK 11,000 a year on average by negotiating the interest rate or switching banks. This agrees well with the figures in a recent population survey from the Consumer Council. It is estimated that those who changed or renegotiated their banking services in 2023 saved around NOK 10,000 per year on average.
Noss says it is typically customers in their 40s who have the most to save.
– This group has the most mortgages and no longer receives the “youth benefits” that many banks offer. With a lower loan-to-value ratio and often better finances than the young, it is also easier to move the loan to digital banks with good conditions, says Noss.
The average interest rate for new users of Renteradar is now 6.05 per cent. Noss believes that anyone with a nominal interest rate of over 5.5 per cent should check their terms against other banks.
The best effective interest rate for a standard mortgage is currently 5.45 per cent (5.32 nominal) in Sbanken and 5.47 per cent (5.34 nominal) in Landkreditt bank for under 60 and 50 per cent respectively .
– Landkreditt, Sbanken and Obos-banken recently lowered their interest rates. Then it will be exciting to see if more people now follow suit, he says.
The best interest rate offers today
The various banks often have their own interest rate offers for specific target groups. First home loans, for example, only apply to those who buy a home for the first time, green home loans only apply to those who have a home that meets certain environmental requirements. Various special agreements only apply if you are a member of certain professional organizations and some banks have their own loan offers for customers with high incomes.
In the tables below, the banks’ interest rate offers for an ordinary home loan are below 75, 60 and 50 per cent loan-to-value respectively.
The matter continues below the tables.
Does not automatically download
As the overview above shows, you get the best offers if you have a loan-to-value ratio of less than 60 percent. And you may be below this limit without knowing it.
If it has been many years since you bought a home, the value of your home may have increased significantly at the same time as you have paid off the loan. But you do not get an automatic interest rate reduction even if you fall below the 60 percent limit. As a rule, the banks do not lower the interest rate without your asking for it. So here you have to follow the class yourself.
Many people do not.
– As far as I know, there is only one bank that automatically lowers the interest rate for you when you reach a new loan-to-value ratio, and that is Bulder. They automatically check the value of your home in their system and adjust accordingly. At the other banks, you are not automatically rewarded in the same way, says Noss.
If you are wondering what your loan-to-value ratio is today, there are online calculators where you can plot your loan amount, which is then measured against a calculation of your home’s value based on the previous sale price and the housing price trend in your neighbourhood.
You can keep your old customer relationship
Noss therefore believes that anyone with a nominal interest rate of over 5.5 per cent should check their terms against other banks.
If you have a loan of four million to be repaid over 30 years, you save just under NOK 1,500 a month by reducing the effective interest rate from 6.05 to 5.45 per cent, according to DNB’s loan calculator. That is almost NOK 18,000 a year.
– It does not take very long to negotiate down the interest rate or change banks. So this can be very good hourly pay, says Noss.
He says some banks accept that you only move the mortgage, while you can keep the rest of the customer relationship with your old bank.
– If you don’t want to change your salary account, you can then just set up an automatic withdrawal to your new account when the mortgage is drawn, says Noss.
He believes it may be a good idea to be a customer of several banks at the same time in order to take advantage of the best offers. For example, one for mortgages, one for deposits and one for normal consumption.
According to Renteradar’s overview, by choosing the banks with the best interest you can get:
4 per cent interest on the current account in Lunar Bank, 5 per cent interest on deposits in Sparebanken Sørøst-Norge and 5.45 per cent interest on ordinary mortgages in Sbanken.
– The banks often try to make it seem as if it is so much better and easier to use the same bank for everything. But it is primarily only the bank itself that profits from you doing that, he says.
This agrees well with a recent population survey from the Consumer Council. When asked which combinations of banking services most prevent you from moving or renegotiating banking services, 58 percent answer that they are total customers.
– Can save billions overall
Most large banks have individual interest rates. This means that there is room for negotiation. Among other things, age and loan size can influence the type of interest you get.
The ordinary list prices of the banks may therefore differ from the interest rate you and your neighbor have.
The banks themselves report the prices to the Consumer Council’s comparison service Finansportalen.no. They are required to do so by regulation.
Director of the Consumer Council, Inger Lise Blyverket, says it pays to be price conscious.
– With a few keystrokes, you can give your bank the opportunity to match a lower interest rate from another bank. If your bank is on the back foot, you just switch banks. Quite simply and very profitable, she explains.
A recent population survey carried out by Ipsos for the Consumer Council shows that 27 per cent of us moved or renegotiated mortgages during 2023. This is an increase from 22 per cent in 2022. 18 per cent of these did so in connection with the purchase of a new home. The population aged 30–44 are the ones who most frequently switch or renegotiate services.
– Higher interest rates and living costs make it more attractive for consumers to use their market power. Overall, Norwegian consumers can save billions of kroner by being more aware when dealing with banks and insurance companies, says Inger Lise Blyverket.
But only one in five who moved or renegotiated banking services used price calculators and price overviews for this. The survey also shows that a clear majority are satisfied with one or two bank connections.
Blyverket believes that the high level of interest rates should give more of us motivation to negotiate interest rates or switch banks.
– Interest does not come in different qualities. Interest is interest, no matter which bank you use. That is why you should always choose the bank with the lowest interest rate, she says.
FYI: Amedia owns 8.3 percent of Hayon, which owns Renteradar. The online newspaper is part of the Amedia group.
Tags: News Economy Saves average NOK year single loan ideal timing
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