Banks base interest rate hikes on assumptions. You should not accept that.
You are probably well pleased with the housing costs you have today, and may also try to save where possible.
It may then irritate you that your bank raises your mortgage rate. The banks explain that the government proposes to impose higher capital requirements on them, which in turn means that they want less money to lend and therefore again expect lower revenues on their lending. However, it does not accept banks and increases lending rates to, among other things, homeowners.
This is what Finance Minister Sigbjørn Johnsen believes you do not have to accept.
– There is absolutely no automation in that new requirements for equity will lead to a rise in interest rates, he emphasizes today’s NRK.
– The banks are responsible for the interest rates they put on the loans at all times. They can not shift responsibility to others.
Also the head of the financial portal, Elisabeth Realfsen, is clear that an interest rate increase is unacceptable.
– You do not have to find that your bank increases your mortgage rate, she says to clicks. no.
Interest rate increase based on assumptions
In this context, it must be aware that new capital requirements have not been adopted.
– What we have said is that we will submit proposals in the spring about new capital requirements, so that banks have based their interest rate hike on something that has not yet been adopted, explains Sigbjørn Johnsen to the click. no.
– No basis for interest rate hike
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When Johnsen indicates that there is no basis for the banks interest rate hike, he justifies this, among other things, that banks have other opportunities to adjust their earnings than at a rate hike.
– They can look at the ratio of share dividend to their owners, the relationship to their own business, and not least look at the type of borrowing costs they have. And here is the fact that banks ‘deposit rates have fallen in the last year, which means that banks’ margins have increased.
According to Norges Bank, the money market rate, which is the rate the banks pay for borrowing, decreased by 0.8 percentage points over the past year. In the same period, the key rate remained constant.
Real Estate in the Financial Portal believes that the best option banks have to meet any capital requirements is to use last year’s profit.
– We believe it provides more than enough financial space to meet the increased equity requirements.
According to Aftenposten Monday 18th. March banks’ profits rose by NOK 4 billion from 2012 to 2011, and the rate of bank shares has increased by 40 per cent since the New Year, which is four to five times better than Oslo Børs.
– Call the bank and claim unrestricted interest rate
The request from Realfsen is to contact your bank as soon as possible.
This should be said in conjunction with the bank
– If you want competitive loan terms, do not use to sit in the chair and make sure that it works. The banks’ job is to maximize their own profits, deliver good results and stay solid. Therefore, they will always try to turn the prices up, like now. It is up to you to keep prices down.
– Today you should call your bank and say you do not accept interest rate increases on your mortgage. The money needed to meet the increased capital requirement, you have already paid with your mortgage rates last year.
And if it does not help with the phone, Realfsen’s advice is to change the bank.
– Check the Finance Portal. No which interest you can get from the cheaper banks and move your loan to one of these banks.
Expect more increases
Even though Norges Bank lowered its interest rate path last week, which means that they push a possible rate of increase further out of time (they actually suggested that interest rates could be put down at the next meeting), banks do not see it as impossible that, in turn, they would have to raise the lending rate further.
– We do not forget that there are several interest rate increases. This may be an increase of 0.8 percentage points (including the noticeable increase of 0.3) during the year, says DNB Information Manager, Aud-Helen Rasmussen, to click. no.
Therefore, borrow more than you need
Can hit the young
Rasmussen does not think the announced increase will imply any drama for homeowners.
– We find that the borrowers are well equipped to cope with a rate increase.
– Our estimate is that mortgage rates will increase by around 0.5 percentage points in the next year, “says economist at Sparebank1, Elisabeth Holvik, to click. no.
– And we believe that an interest rate increase in this order will be unproblematic for most people.
However, she sees that especially the young people will be able to have problems if interest rates rise significantly more than she has suggested.
An analysis from the Danish Financial Supervisory Authority shows that borrowers under the age of 35 are overrepresented in terms of loans above 90 per cent of housing value.
“While under 10 percent of households in these groups had debt more than three times income in 2000, the proportion was increased to 23
percent in 2009. This is a worrying development, “they write in the analysis.
This is also a concern Finance Minister Johnsen shares.
As the mortgage rate rises, some families with small children, but also other mortgage customers can come in a very difficult situation. And what we see now is that the level of interest we are seeing now in Norway and internationally is abnormally low in the sense that there is a crisis in Europe. But there is one thing that is certain, and as soon as the European economy is on its feet again, interest rates will rise both in Europe and in Norway. When it’s going to happen is hard to predict, but it’s going to happen, I’m definitely on it, so it’s important to take it into account when borrowing, “he said..
The vulnerability to a possible higher interest rate increase is also supported in the analysis by the Danish Financial Supervisory Authority.
Small margins for families with children
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According to the analysis, the group under 35 years is overrepresented among those who have borrowed more than 90 percent of the value of the property. The analysis also shows that in 2009, in the groups “Couple with children 0-5 years” and “Couples without children under the age of 30 years”, they found that most people had borrowed more than three times the income.
With such a large loan, the margins are small for this group of borrowers, and according to the Danish Financial Supervisory Authority’s calculations, a two percentage point increase in interest rates could have major effects.
“The calculations show that then the number of households with high interest burden more than doubles”, they write in the analysis.
– However, there are no clear answers to what makes sense of interest, as this depends on factors such as income and age. A low income person will spend a greater share of necessity goods and therefore notice a higher interest rate increase, the senior communications advisor in the Danish Financial Supervisory Authority, Jo Singstad, outlines. no.
Concerned over several deduction-free loans
Another trend that the Danish Financial Supervisory Authority has revealed is that more and more agreements are signed for loan-free loans. And here too are the young people who are overrepresented.
– FSA is worried about the increase in deductibility because it makes households more vulnerable to a possible setback. This is also the reason why, according to the guidelines for lending practices, as a rule, repayments will be paid when the loan ratio is higher than 70%, explains Jo Singstad.
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