– Bind rate for as long as possible, ie 10 years. Alternatively tie half of the loan now and bet that interest rates will be even lower later in the year if you’re afraid to miss an even better offer.
It says chief analyst for Credit Pål Ringholm in brokerage Swedbank.– Recommendation is suitable for those who will ensure low interest rates, and thus no surprises, for a long time.
Ringholm says it fixed interest may be seen as an insurance against higher interest rates.
– I can not guarantee you that you hit bottom or that this will be more profitable than having a floating rate, but I can guarantee that fixed interest now, will provide a safe and low interest rates for years to come, says Ringholm.
– Economists have previously recommended people to fix the interest at levels that are much higher than today. Risking you to go on a real blow again?
– We can of course be hung out if interest rates fall even more – we expect that it will do in the short term. But we hardly in a proper bang, because outcomes are now very skewed. Interest rates may be lower, but it can simultaneously also be much higher.
Recent figures from Statistics Norway show that more than 9 out of 10 loans to Norwegian wage earners have floating interest rates.
last year, the proportion of floating rate loans increased from 90.0 percent to 91.5 percent.
– We have no tradition of fixed interest in Norway. For example, much more prevalent in the United States. But I think and hope more will consider tying the interest now, says Ringholm.
Erik Bruce, senior analyst at Nordea Markets:– Fixed interest rates are low with a good reason. The floating interest rates may fall further and will likely remain low long – therefore it is not necessarily much to gain interest rates. But from a prudential seems sensible to fix the interest rate for a longer period. Floating rate can go up much in the longer term, while the potential for further rate cuts is limited.
Shakeb Syed, chief economist, Sparebank1 Markets:
– Fixed interest is an insurance and the price is now historically low. A low price does not mean that you are necessarily going to buy insurance. The decision fixed interest depends initially on the sensitivity of the individual household is any increase in the floating interest rate. If one is noticeably delayed by an increase – for example, because of high debt and low job security – should consider interest rates. The price of such a fixed interest is unlikely notably lower than nowadays. But consequently, the price alone should not be the only motivation for interest rates.
Kjersti Haugland, senior economist at DNB Markets:– For mortgage customers who fancy or need more financial predictability may be wise to fix the interest now. Levels are historically low, and we estimate that the long market has reached bottom. Projections are uncertain and interest rates might fall further, but at the current low level there is still a limit to how much more they may fall.
Steinar Holden, professor of economics at the University of Oslo:– It must be up to the individual. Fixed interest can be valuable as an insurance against interest rate rises much. Now you can secure low interest long through fixed-interest, but because it seems that the short, floating interest rates will also be low for a long time.
Jan Ludvig Andreassen, chief economist at Eika :– The current low interest rates seen as extraordinary, but will probably be the new normal level. Where there were previously prohibitively expensive to secure long-term and cheap financing, it is now affordable fixed-rate 3, 5 and 10 years. Although, I think interest rates will fall further, but I can always take the wrong. And although Norges Bank rate should be halved, will hardly floating mortgage for most people fall below two percent. When you lose anyway not much to choose fixed now.
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