For a loan with a 50 percent loan-to-value ratio and a 3-year term, the average margin is 232 bps. This is 4 bps lower since last time. In the bulk of new loans, the margin is 236 bps, 3 basis points lower since the fourth quarter.

For the first time in two years, we observe signs of positive sentiment among the banks. The majority of banks have growth ambitions but are still cautious about taking risks. Consequently, competition for the most attractive customers is increasing. The safest engagements achieve an average margin of 182 bps. This is 10 basis points lower than in the fourth quarter.

The majority of new loans still have a total loan cost slightly above six percent, assuming a 5-year fixed interest rate. This is approximately the same as in the fourth quarter but 0.5 percentage points lower than in the third quarter. If a floating interest rate is assumed (3-month NIBOR), the overall borrowing rate is around seven percent.

Do you want to know more about the findings from the banking survey? Please contact Robert Nystad at nystad@union.no or 906 19 758.