Mortgages in Norway

Norwegian Mortgages

Over recent years, the price of property in Norway has increased at a steady rate, producing a national average of 7.5 percent. Of course, with a country that has so many different regions, it is not surprising that some areas perform better than others and that some of the faster growing regions have seen more boom growth

Mortgages in Norway

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Introduction to Norwegian Mortgages
Obtaining a mortgage in Norway is actually easier and generally more flexible than we are used to in the UK. In particular, many of the main banks are prepared to offer financing on buildings that would normally be considered un-mortgageable, such as those of timber construction or property that is in need of substantial renovation.

Fortunately, banks in Norway have recognised the growing property market and the way in which the value of property has escalated in recent years. This has led to a feeling of positivity and comfort, across the Norwegian mortgage market.

Benefits of a Norwegian Mortgage
Interest rates in Norway are low in comparison to many other European countries, including the UK, making repayment terms generally more favourable.

The Krone is also performing well, meaning that UK investors could benefit twice from a Norwegian mortgage: firstly from the competitive interest rates and secondly from the excellent exchange rate when comparing real costs with the UK.

Obtaining a Norwegian Mortgage
The application process is relatively straightforward in Norway. Foreign purchaser opting to finance a property in this way will need to prove that they have sufficient income to make repayments and that the property itself offers sufficient security to the lender.

It is normal practice to obtain an offer of mortgage based on income, before locating a suitable property, so that a buyer can be certain that the properties they are considering are within budget. Having an offer will also enable a buyer to negotiate freely with the vendor, knowing that they are able to go ahead with the purchase.

Once a property purchase has been agreed, the lender then engages a valuer to determine whether or not the property offers suitable security. The cost of engaging a valuer is normally met by the purchaser.

Typically, borrowers are able to obtain a mortgage of up to approximately 90 percent of the purchase price and can opt to repay the mortgage over a period of between 5 and 25 years. Potential rental income is also taken into account when calculating the amount that can be borrowed.

Once the mortgage is in place and the funds have been transferred, the mortgage deed will be entered on the registry so that the lender¡¦s interest is protected.

Summary
Bullet Point The Norwegian mortgage application process is very similar to the UK process;
Bullet Point there is often greater flexibility with the type of property that can be offered as security;
Bullet Point interest rates are low and payment terms generally very favourable, throughout Norway.

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Typical Interest Payments

First Time Buyers

2.89%

Purchased Fixed

2.89%

Discounted Rate

2.99%

Buy To Let

2.99%

Commercial

3%

 

 

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