Banks and analysts believe that spring 2015 will provide record low mortgage interest rates in Norway. Money market rates are falling. Still there are zero losses in banks. Lending volumes have increased tremendously and still rising. And competition increases, Finance writes newspaper.
DNB cuts on Monday the best fixed rate offer to 2.5 percent. Equally low is Danske Bank and Nordea. With more interest rate cuts in wait will probably floating mortgage rates in the market roam down to 2 percent before the summer.
The new leader for retail customers of Danske Bank, Trond Mellingsæter, cut last Friday mortgage rates down to 2 , 7 percent. He priority Academician members under 34 years, but it started a rat race among banks.
– The price we put on mortgages affected by market conditions and funding costs, as well as the competitive situation, says Mellingsæter Finansavisen.
Room for more cuts
Banking analysts believe there is more going on:
– I still think it will come clean cut on mortgages both DNB and the other banks. Danske Bank is going to be the most aggressive bank when it comes to mortgage rate in Norway. They have lower capital than Norwegian banks, and a stated goal of taking a stronger position in Norwegian mortgage, says banking analyst Christopher Adams SEB to Finansavisen.
He also recalls that banks still have the opportunity to reduce interest rates on deposits to compensate lower mortgage margin.
In the previous financial report reported DNB a volume increase in the private market of 7.9 percent over the past two years, while net interest income from private customers increased by 33 percent in the same period.
DNB did as Danske Bank and continued last Friday down interest rates. DNB best mortgage rate was with the 2.9 per cent of young people under 34 years and clients in DNB Saga program. For all other customers are interest rate reduction of up to 0.25 percentage points.
With declining market DNB will have to participate in price battle that is now underway.
On Monday bank continues their interest rate cuts in the private market. When will real interest rate is down to 2.5 percent to the bank’s priority customers, assuming a three-year bond.
– What’s ahead, we can not say anything about in the media, but we have promised to be competitive, and it also applies to price, says executive director of retail banking Trond Bentestuen Finansavisen.
Read the full story in Saturday’s edition of Finansavisen!
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