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4877
Continued increase in share of fixed interest
statistikk
2009-08-26T10:00:00.000Z
Banking and financial markets
en
orbofur, Loans with fixed interest rates from banks and other financial corporations, lending, fixed-rate loan, fixed-rate periodFinancial institutions and other financial corporations, Banking and financial markets
false

Loans with fixed interest rates from banks and other financial corporations, Q2 2009

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Continued increase in share of fixed interest

The share of loans with fixed interest from financial enterprises to Norwegian households increased from the 1st quarter to the 2nd quarter of 2009. The share increased the most in state lending institutions.

Banks, mortgage companies and state lending institutions. Share of fixed interest loans to households. Q1 2004-Q2 2009

From 2004 to the end of 2008 there has been a declining trend in the share of loans with fixed interest from financial enterprises to households. Figures for the 1st and 2nd quarter of 2009 indicate that this trend may be about to change. After an increase of 2.41 percentage points in the 1st quarter, the share of loans with fixed interest from financial enterprises to Norwegian households continued to grow by 0.5 percentage points in the 2nd quarter. This share is now 9.6 per cent and at its highest level since the 2nd quarter of 2006. For comparison, the share of loans with fixed interest to households was at its lowest level at the end of 2008, with 6.7 per cent.

Considerable increase in the share of fixed interest loans from state lending institutions

The share of loans with fixed interest from state lending institutions to Norwegian households increased to 31.3 per cent in the 2nd quarter of 2009. Despite the increase, this share is still considerably lower than 4-5 years ago.

The share of fixed interest loans from banks to households increased from 7.3 per cent at the end of the 1st quarter to 7.5 per cent in the 2nd quarter. The corresponding share in mortgage companies remained unchanged (6.6 per cent) in the same period.

Increased share of fixed interest loans from 1 to 5 years

Figures indicate that households prefer the interest rate to be fixed for an interval of 1-5 years. In state lending institutions, this share increased by NOK 11.1 billion from the 1st quarter to the 2nd quarter 2009. This equals an increase from 20.5 per cent to 26.4 per cent in this period.

In banks and mortgage companies, the shares of loans with fixed interest in the interval 1-5 years to households increased from 4.1 and 3.4 per cent respectively to 4.3 and 3.5 per cent from the 1st quarter to the 2nd quarter of 2009.

The share of loans with fixed interest for more than 5 years from mortgage companies to households increased by 0.1 percentage points in the 2nd quarter. Corresponding shares in banks and state lending institutions remained unchanged.

Fixed interest loans to households from banks, mortgage companies and state lending institutions by fixed interest period. Q1 2004-Q2 2009. Share of total loans
Quarter Banks Mortgage companies State lending institutions Mean
Less than
1 year 		1 to 5 years More than
5 years 		Total Less than
1 year 		1 to 5 years More than
5 years 		Total Less than
1 year 		1 to 5 years More than
5 years 		Total Less than
1 year 		1 to 5 years More than
5 years 		Total
Q1 2004 2.0 8.8 0.6       11.3 13.4 21.8 8.9       44.1 4.3 37.9 0.0       42.2 2.9 13.8 0.9       17.6
Q2 2004 1.6 8.5 0.6 10.6 11.7 19.5 7.3 38.5 4.5 38.2 0.0 42.7 2.5 13.4 0.9 16.7
Q3 2004 1.4 7.8 0.5 9.7 11.2 19.1 7.1 37.4 5.4 42.0 0.0 47.4 2.5 13.2 0.8 16.5
Q4 2004 1.6 7.2 0.5 9.2 11.8 16.2 8.1 36.1 4.0 40.4 0.0 44.3 2.4 12.2 0.8 15.4
Q1 2005 2.0 6.8 0.5 9.4 14.2 15.7 8.1 38.0 8.6 33.5 0.0 42.2 3.5 10.8 0.9 15.2
Q2 2005 2.7 5.5 0.5 8.7 11.1 15.0 7.2 33.3 9.9 32.0 0.0 42.0 4.1 9.4 0.8 14.3
Q3 2005 3.2 4.5 0.5 8.2 11.7 12.2 6.7 30.7 9.6 30.4 0.0 40.0 4.4 8.2 0.7 13.3
Q4 2005 2.9 4.1 0.6 7.6 16.7 14.6 7.7 39.0 8.6 30.5 0.0 39.1 4.1 7.8 0.8 12.6
Q1 2006 2.2 3.9 0.5 6.7 17.1 12.9 7.7 37.7 9.2 28.6 0.0 37.8 3.6 7.3 0.7 11.6
Q2 2006 1.5 3.6 0.6 5.7 15.5 10.4 6.4 32.4 3.9 28.8 0.0 32.7 2.2 6.8 0.7 9.7
Q3 2006 1.3 3.4 0.5 5.2 10.3 7.3 4.2 21.7 3.4 28.5 0.0 31.9 1.9 6.4 0.6 8.9
Q4 2006 1.4 2.9 0.7 4.9 4.7 7.3 4.8 16.8 3.0 27.4 0.0 30.4 1.7 5.8 0.7 8.2
Q1 2007 1.5 2.9 0.8 5.1 3.3 5.0 3.3 11.6 1.4 32.5 0.0 33.9 1.6 6.2 0.8 8.6
Q2 2007 1.5 2.6 0.8 4.9 2.5 4.0 2.2 8.7 1.7 32.2 0.0 33.9 1.6 5.8 0.8 8.2
Q3 2007 1.6 2.4 0.7 4.8 3.0 3.3 2.0 8.3 3.9 30.5 0.0 34.3 1.9 5.4 0.7 8.1
Q4 2007 1.5 2.5 0.7 4.8 3.0 2.2 1.4 6.7 9.6 23.6 0.0 33.3 2.5 4.7 0.7 7.9
Q1 2008 1.4 2.5 0.7 4.6 2.3 1.7 2.6 6.6 9.6 22.8 0.0 32.4 2.3 4.5 0.8 7.7
Q2 2008 1.2 2.6 0.7 4.5 1.6 1.3 2.3 5.3 12.7 20.3 0.0 33.0 2.4 4.2 0.8 7.5
Q3 2008 1.1 2.8 0.7 4.6 1.1 1.2 1.9 4.2 12.3 20.5 0.1 32.8 2.2 4.3 0.9 7.3
Q4 2008 1.1 2.6 0.6 4.4 1.3 1.7 1.8 4.8 7.6 20.1 0.1 27.7 1.8 4.2 0.8 6.7
Q1 2009 2.4 4.1 0.7 7.3 1.4 3.4 1.8 6.6 7.2 20.5 0.1 27.7 2.6 5.6 0.9 9.2
Q2 2009 2.5 4.3 0.7 7.5 1.2 3.5 1.9 6.6 4.8 26.4 0.1 31.3 2.4 6.3 0.9 9.6

Fixed interest on loans in Norway

Fixed interest rates on loans give predictability for interest costs, and can be regarded as insurance against increasing interest rates. There are several possible reasons for the traditionally low share of loans with a fixed interest in Norway. Among other factors, it could be that borrowers consider fixed interest more of a speculation than insurance. Another reason could be that the Central bank’s projections for the key policy interest rate are clearly communicated to the market.

1 We estimate that 0.5-1 percentage points of the increase from the 4th quarter of 2008 to the 1st quarter of 2009 can be explained by changes in one bank’s method of reporting figures for fixed interest rate loans. The bank’s methodical changes have primarily affected figures for loans with a fixed interest rate of less than one year.