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Fast Comment NorwayNorges Bank's Survey of Bank Lending: increased demand for fixed-rate loans

  1. Credit standards broadly unchanged, as expected
  2. And expected to remain so ahead
  3. Increased demand for fixed-rate loans
Norges Bank’s Survey of Bank Lending 1/2018
Norges Bank has today published its Survey of Bank Lending for the first quarter. As expected, credit standards were broadly unchanged and banks also expect these standards to stay broadly unchanged ahead. Note that the tightening of the mortgage market happened most notably in Q1 last year, when stricter rules for mortgage lending were introduced. Banks tightened somewhat further in Q2 last year, but changes since then have been minimal. According to previous lending surveys, the debt-limit rule of five times gross income has been the key factor in restraining household credit conditions. The current lending rules expire at the end of June, and there is ongoing debate as to whether some of their key features should be eliminated or extended; this is especially the case for the “special rules” for Oslo, which the financial supervisory authority has proposed to scrap. However, the fives times income limit is still the predominant restraining factor. There appears to be widespread belief that this part of the regulations will be extended. As such, we do not believe any softening of (local) regulations in itself will cause a sharp and debt-driven spiral in the housing market. With regard to credit demand, the banks reported small changes this time. But household demand for fixed-rate loans increased somewhat and is expected to pick up further in Q2. This is probably due to expectations of higher interest rates, as signalled by Norges Bank.


Marius Gonsholt Hov

Senior Economist


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