The competition in the banking market is high, and in the fourth quarter, all banks in the survey reduced their margins. For a standard loan (50 percent loan-to-value and 3-year tenor), margins have fallen by 41 basis points over the last 12 months, to 195 basis points. For the first time in 2.5 years, the margin for a standard loan is below 200 basis points.

After a fall in the 5-year swap in the last month, interest rates are approximately at the same level as when the survey was conducted in the third quarter. As a result, the total financing rate declined further in the fourth quarter, driven by lower bank margins. For the majority of new loans, the total financing rate in the fourth quarter is 5.7 percent, approximately the same as for a standard loan.

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.