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Power, Interest | Electricity prices worry more than high interest rates: – Actually, everyone with a mortgage should be most concerned about the interest expenses

Power, Interest | Electricity prices worry more than high interest rates: – Actually, everyone with a mortgage should be most concerned about the interest expenses
Power, Interest | Electricity prices worry more than high interest rates: – Actually, everyone with a mortgage should be most concerned about the interest expenses

Interest rates are rising, and people with mortgages are really starting to feel the increase in expenses, according to a survey by Sparebank 1. But electricity and food prices are the most worrying.

Just before the interest rate announcement from Norges Bank on Thursday, Sparebank 1 received the survey on how Norwegians deal with increased interest rates and prices.

Here it appears that almost three out of four have taken one or more measures this year to deal with rising prices and increased interest rates.

– It shows that the vast majority of people are prepared for the cost increases to come. The survey shows that many have already started to reduce consumption because expenses are rising and interest rates are rising. For the time being, it seems that people are able to handle expensive times and high interest rates, but it is a challenge that price increases and interest rate increases have come both sharply and quickly, says consumer economist Magne Gundersen at Sparebank 1 to NTB.

Half of the respondents have reduced their electricity consumption, while around one in four have postponed or dropped major purchases, cut food expenses or reduced expenses for holidays and travel.

Should fear rent

Among the respondents, it is those with mortgages who are most worried about their personal finances right now, but it is not higher interest rates that are the scariest. 52 per cent are worried about the high electricity bills, 46 per cent about the high food prices, while 41 per cent are worried about the high interest rates.

– Actually, everyone with a mortgage should be most concerned about the interest expenses. That increase in costs amounts to much more than increased food costs, and for electricity costs we have put such good arrangements in place now. So it is the loan costs that will sting the most, especially for those who have a high loan compared to their income. It affects, even if you get a tax deduction for the interest, says Gundersen.

Taking action

The consumer survey was carried out by Respons Analyze for Sparebank 1 in the period 15–22 September with a nationally representative selection of 1,069 people. Gundersen says that it seems that most people are managing, for the time being, and that fortunately many have already taken deliberate steps to cut expenses.

– Many have seen that they will have to do something – and are already doing it now. It is the adjustment that is difficult. It is probably tough for many to manage to cut consumption as quickly as expenses rise, and interest rates are twice as high now as they were two years ago. People are also aware that it will rise even more, and that will hit hard. They are prepared for that. I think people are a little afraid, he says.

He says it will be extra hard for those who support children alone, without anyone to share expenses with, and have to deal with price increases for food, petrol, electricity and loans on top.

Debt-free pensioners

– When we look at the survey, it is usually pensioners, especially those with little or no credit, who are the least worried, and if pensioners are worried about any expenses, it is usually the price of electricity, says Gundersen.

In the general population, one in six is ​​not worried about their personal finances right now. Among pensioners, the proportion is more than twice as high.

– 35 per cent of those over 67 are simply not particularly worried.

(© NTB)

The article is in Norwegian

Tags: Power Interest Electricity prices worry high interest rates mortgage concerned interest expenses

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