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Tuesday, April 16, 2024

Jensen keeps mortgage rules strict

Finance Minister Siv Jensen has decided to extend some strict mortgage rules imposed last year on capital requirements and fewer tax breaks for investors. The goal is to keep speculators from driving up real estate prices in an already hot housing market.

Analyses from financial authorities and the central bank show that the rules imposed last year (which, for example, require down payments of at least 15 percent of a home’s purchase price) “are working in line with the intention,” Jensen said. “Fewer than before are taking up quite large loans when they buy a home.”

Home-buyers are also not allowed to borrow more than five times their gross income. Buyers of second homes or rental properties in Oslo must put up down payments of at least 40 percent of the purchase price, while secondary homes are now taxed at a higher rate than owner-occupied homes. Those rules were put in place in an effort to help first-time buyers who were having a tough time competing in bidding rounds against investors and speculators backed by lots of existing equity.

“The banks are now putting a priority on young- and first-time homebuyers when they use their flexibility quotas,” Jensen said. She also noted that since housing prices are rising one again, “I think it would be wrong to do away with the stricter rules now.” They were due to expire on June 30. staff




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