Banks Alert Interest Rate Increase

Last week, some Norwegian banks including DNB have decided to raise their interest rates by referring to the EU and the government’s requirement for increased capital for mortgage. 

Read also: Individual Debt in Norway Reaches a Record Level

But this explanation did not convince Jorge Jensen, Director of Finance at Norwegian Consumer Council. He referred to a report from the Finance Authority stating that the requirement of additional equity will cost 10-11 billion NOK to the banks. 

– Banks are pushing the government ahead of them when they claim that the demands of equity is the reason for more expensive loans. My view is that the banks can take their profits to strengthen their capital rather than to overturn the bill on to customers, he said.

The Consumer Council also warned the bank customers stating that Mortgage customers should not allow banks to socialize the cost of their own operations. 

– The most reliable customers are mortgage customers and they already pay the bill for other risk activities in financial conglomerates. Consumers do not have to accept the announced increases in mortgage interest rates without further ado, says the council director Emil R. Steffensen.

Steffensen also noted the customers should renegotiate the issue with their customer relationship with the bank or start a process of moving house loan, if they receive interest increase notification.

Rent increase DNB announced on Friday is 0.3 percentage point, which would mean 6000  NOK more interest for a loan of 2 million. 

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