Norges Bank surprised when they announced that interest rates would rise to 4.5 percent and stay there until 2024. Homeowner Stein-Christian Andersen is not worried, but will save less.Published: Published:
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On Thursday, Norges Bank raised the policy rate by one step to 4.25 percent – the highest level since November 2008. At the same time, the central bank warns that interest rates will rise further to 4.5 percent in December, which surprised many. In this case it will be the fourteenth increase in two years.
They also estimate that mortgage interest rates will rise to 5.7 percent in the winter. However, for countries with a lower loan-to-value ratio, monetary policy tightening will have less effect.
Department manager Stein-Christian Andersen has been active in the housing market for twelve years and recently sold his first apartment of 34 square meters.
Thanks to a small loan in the beginning and higher income from work, he was “in good shape”. Moreover, he is satisfied with the square meter price he got for the apartment he sold.
– I’m not too worried about the increases, because they don’t bother me that much, Andersen tells E24.
His mortgage rate is 5.08 percent on Thursday. It will probably happen soon.
Because he has tightened his budget a bit for the new apartment he bought, he has a ‘good margin’ when it comes to monthly costs.
– However, I will be able to save less money, and rather more in the apartment, he says.
We are waiting for cuts
At the same time, many are eagerly awaiting when the interest rate cuts will come. Norges Bank itself thinks that this will not happen until the end of 2024 at the earliest, according to the new bank. the interest paththe interest pathA prediction for the future development of the policy interest rate. their.
The yield spike has been consistently pushed forward due to high price levels and a more resilient economy than expected, and last week’s report was no exception.
The forecast for the policy rate has been revised upwards compared to the report published in June, and the central bank now signals a policy rate that will remain around 4.5 percent throughout the year.
‘Higher for longer’
Only at the end of next year will the central bank indicate that we will return to the current level of 4.25 percent.
– From that moment on, the expected interest rate development will gradually decrease, chief economist Marius Gonsholt Hov tells E24.
Interest rates have been adjusted upwards more than inflation expectations, yielding higher real interest rates and having a clear tightening effect, the chief economist said.
The Central Bank believes that it will probably be necessary to keep interest rates high for some time to come.
The concept of higher interest rates for a longer period of time has become the main theme in interest rate markets today.
– A lot has to change before we can make cuts more quickly. Tougher interest rate medicine is needed to curb capacity and price pressures, Hov says.
Chief economist Kjetil Olsen supports Nordea Market’s prediction that the first interest rate cuts will not take place until 2025.
– At the same time, the higher interest rates rise, the more ‘damage’ to the economy and the faster an interest rate cut can come, Olsen tells E24.
– Not so affected – E24