Norway has a deeply impactful strategy to help the nation and its people come out of the COVID-19 pandemic in the most positive way possible. A huge part of this process is undoing a lot of the policies which have been brought in over the last year and a half, as they were focused on keeping the economy stable and the public alive, but now it is time to look to the future and start fixing the damage the virus has dealt.
While it will take years to get back to the economic projections of the pre-lockdown world, these strategies are starting to come in to effect now, with one of the biggest ones so far being the raising of the key interest rate to 0.25%.
While this may seem like an insignificant number, when you extrapolate it to the kind of numbers you are expecting from large personal loans and mortgages, it represents a significant increase in the amount that citizens will be expected to pay back.
Following in Suits
The aim is to bring interest rates up to 1.75% by 2024, which is a much more intimidating number, but it is all for the greater good in ensuring that the country can stay strong and recover the significant amount of loss over the last 18 months.
In response, key mortgage and loan providers have raised their interest rates to match or, in some cases, exceed the government-sanctioned level. Even with the months of warning from the government and media, this still seems like a sudden change as many of us have gotten used to the 0% interest rates banks offered during the time of global crisis.
Why Should I Start Paying More?
Key members of DNB, as well as other firms, have stated that it is now time to look towards the future of Norway and that this raise in interest was not only expected, but necessary to ensure the growth of the country as a whole.
While 0% interest loans is great for a while to help the public get back on their feat after long periods of uncertainty, it isn’t ideal for the nation’s economy. As much as we like to demonise banks in the modern age, it is importing that they can make profit from loans to allow banks to lend to more people and keep the economy moving swiftly and efficiently.
When Will this Hurt My Pocket?
Those looking for new loans and those with existing loans with remaining repayments can expect to have their rates raised starting November, making this a very important time to make sure you have your finances organised and some extra money free to help with the increased value of repayments.
As a populace I feel we have already become too used to having access to interest-free forbrukslån på dagen we needed them, and this interest rate raise will be an annoyance to many, but it is a sign that our nation is healing and that the future is bright.
Easing it in
Luckily, this scheme is being phased in slowly to help all borrowers deal with the change in repayments while allowing lenders to start building their profit margins quick enough to keep their organisations growing. Further increases will be small to match the current increase and they will be distributed at regular intervals throughout the next few years.
Especially with the Norwegian government’s transparency on these matters, it will be very easy for your average citizen to stay prepared for the increases if they make sure they keep one eye on the news and future government announcements.