Norwegians are bad at changing banks, and therefore the interest rate is higher than it should be.
Most likely you have a mortgage, and almost as likely have you kept the same bank for many years without considering exchanging. But at the same time you may be in the store that has the lowest prices. So why do not you change banks when there can be several thousand patches to pick up? By not exchanging, you help to maintain the status quo in the market and reduce competition in the market. In the long run, you’re not a bank customer worth it.
NRK. no wrote in 2011 that consumers lose around 10 billion on not being more aware of bank transfer. According to Professor at the Norwegian School of Business in Berge, Trond Døskeland, this is due, among other things, to what is known as a change in change.
– It is very strange that people who are otherwise concerned with sales and offers forget about the bank’s price, he stated to the site. But Døskeland is not surprised by this change.
– Research is a familiar phenomenon. If things seem overwhelming and complicated, people think it’s best to just continue with what is known. Of course, this knows the banks, and they are doing it very well.
– Take market power
Aftenposten wrote 20. March on how weak competition between banks means that the interest rate level is higher than it should be. Aftenposten describes, inter alia, a situation where the small banks follow market leaders such as DnB.
– The interest rates in the Norwegian banking market are largely attributable to a few major players, with DNB in the lead. The rest only follows, says BI Professor Arne John Isachsen to Aftenposten. no.
Director of the Financial Portal, Elisabeth Realfsen, has no doubts as to what consumers should do in relation to the major players in the banking market.
– Apply the consumer power. It’s our strongest weapon, she says to clicks. no.
And with the Homeowners’ League, they are very unhappy with the situation in the banking market. They have little sense of DnB’s description of a spleen layer.
– There is no spell bond that strives to meet the authorities’ demands for increased core capital in banks. You and I pay the value. This money does not disappear. They fall short of owners and owners have become much richer at our expense, CEO Peter Batta says to click. no.
Negotiate first, then switch
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According to Elisabeth Realfsen, it is easy to swap the bank for the one who wants it, and at the Finance Portal. No, you will find an in-depth description of how to change your bank.
And she is supported by the central bank chief, who stated at the press conference at the monetary policy meeting last Thursday:
– It is possible to change the bank and it is not very difficult, he said to the evening post. no.
What one should do first, however, is to negotiate with the bank to try to reduce interest rates on loans (and, if applicable, the deposit rate).
“How much you can save on bank change depends on how good your conditions are today, what conditions you can get by swapping or using more bank connections and what it will cost you. But the chances are that it will pay for you to ask the bank you have better bank conditions or switch banks for one or more banking services, “they write.
If you have had a meeting with your current bank, concluding that they can not give you enough conditions, the next step will be to change bank. According to the Finance Portal, something your new bank is happy to help you with. In the Finance portal you will also find a service called Switch Bank.
Almost free to change bank
Anyone wishing to move their mortgage to another low interest rate bank can do this almost free of charge.
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There are two charges that may be incurred. One will not get you away, while the other will get you if you switch to the right bank.
The state requires a registration fee for the transfer of collateral documents, one bank to another. However, this fee is no greater than NOK 200 if the loan assumptions are not changed.
“The lower fee applies when refinancing loans within the same lending framework, with the same mortgagee and the same mortgage. If the loan is raised by increased borrowing, or more pledges / guarantors or a supplementary pant or the like are established, it will be paid ordinary registration fee, “the Mapping Authority writes on its pages. , but adds that the fee reduction does not apply to mortgages in residential units.
The other fee, if any, is the establishment fee. However, many banks have nullified this fee.
– And if you use the finance portal’s interest rate bargaining, any fees will be included in the effective interest rate, explains Elisabeth Realfsen.
Focus on the other banking services
The council of Elisabeth Realfsen is that no bars focus on the lending rate on mortgages when banks are to be considered.
– What to focus on will depend on the life phase you are in. For young people in the establishment phase, the interest rate on the bank loan will be decisive, whereas for those who have passed 50, the deposit rate will probably be the most important. And in all life stages, so-called daily banking services will be important, she says.
– Ok, then I start throwing the paddy boxes on the street
– And in that context, there is nothing wrong with having more banking connections. One example can be one bank for the home loan, one for long-term savings and one for daily use, such as payroll account.
Not keen to have the lowest interest rate
DnB has received a lot of criticism for its so-called spleizelag, while accusing them of using government capital requirements to raise interest rates more than necessary. According to Finanstilsynet, DnB is by far the largest bank in the market, with a market share of 35 percent.
If you want to interpret the Financial Portal’s interest rate barometer, it may seem that the bank does not use its position to give its customers the best interest rate. For a loan of 2 000 000 within 60 per cent of the value, the bank will be far below the list (please note if you are neither a member of the academics nor qualify for youth loans).
And when it comes to bank deposits, the bank does not get up. For a deposit of 500,000 kroner, the bank offers a rate of three percent, while the best can yield close to four percent.
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– There is no placement on the lists that are most important to us, but that we are competitive overall. At the top of the list there are many loans with special terms, for example, related to home or environmental housing, communication director Thomas Midteide says to click. no, who believes that the number of new approved mortgages describes a competitive bank.
– Last year it was over 100. 000 families who chose to borrow money for housing with us, and it shows that we are overall competitive.
Too complicated to switch bank
Researcher at the Norwegian Institute for Consumer Research (SIFO), Lisbet Berg, does not think good competition conditions are sufficient to get people to switch banks (for mortgages). One of the explanations for the lack of elasticity in the market is what she calls Consumer Attention Deficit Syndrome (CADS).
– It simply means that consumers do not have the capacity to stay informed and up to date in all the markets they have to deal with in everyday life, she says to clicks. no and believe that many are concerned with things other than their banking economics.
Therefore, they keep up with their more expensive bank year after year. They prefer to save by being ‘good consumers’ in other areas.
She believes that banking customers can assess their banking relationship on the basis of conditions other than the terms of interest.
If you find that the bank in question does not take corporate social responsibility and becomes too greedy on its own behalf, it could cause customers to become outraged and apply to the Finance Portal to find a cheaper bank.
Berg says that she usually tells all those who are not particularly concerned with their banking economy that it is about finding a bank that does not discriminate its customers. Thus, stay away from banks that provide terms for their active customers, which in turn can be subsidized by the bank’s passive customers.
– Switch bank to online banking with good and equal conditions for everyone. It is profitable and easiest in the long term.
– Only banks that serve customers are not active
In a letter in March this year to Minister of Finance Siv Jensen, Huseiernes Landsforbund (HL) highlights what they experience as a lack of competition in the banking market. “. but insists that more and more conditions indicate that competition between banks in Norway is weaker than desired, “they write in the letter. Had the competition between banks been greater, HL believes that the interest rate on mortgage loans would be lower. “Everything is fully financed by the loan customers,” they argue in relation to the increased capital requirements banks have received.
A factor that could affect the determination of interest rates is the customer’s willingness to switch to the bank that offers the best interest rate.
– The only ones that serve customers not to be active are banks, deepens associate professorship at BI Norwegian Business School, Charlotte Østegaard, against clicks. no.
– I think customers are cautious about switching banks because they find that there are costs of switching, in the form of surveys to be done to find the best bank and forms to be filled out..
Do not pay what is stated on the
Østergaard also experiences that the Norwegian economy is explaining why customers are not moving between banks.
Since good times in Norway, customers have little need to find the lowest interest rate because they still have no problems paying the interest rate they have.
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