The Financial Supervisory Authority of Norway published its 2025 Mortgage Lending Survey, showing that new mortgage lending is moving closer to the revised 90% maximum loan to value (LTV) limit and that borrowers taking out new home loans are again taking on more debt relative to income. The authority links the higher LTVs to the changed equity requirement and warns that higher borrowing against home values can leave more borrowers exposed if house prices fall. Average LTV increased for both new amortising mortgages and credit lines, to 66% and 46% respectively, with a clear shift of lending volumes toward the 90% cap after the increase from 85% to 90% for new amortising loans. Total debt to income for new mortgage borrowers rose by 6 percentage points to 329% after two years of decline, though it remained below 2019–2022 levels. On affordability, the lending regulation’s stress test assumes a 3 percentage point rate rise and at least a 7% interest rate; the share of new loans to borrowers with negative monthly buffer after the stress test was stable at around 2%, while the share with weak liquidity (NOK 0–4,000 buffer) declined after several years of increase. New postcode data showed debt to income highest for collateral in the most central municipalities, while LTV was highest in less central municipalities. Among first time buyers, average LTV edged down but average debt to income increased, and a higher share exceeded the regulation’s five times income debt limit than in 2024; within banks’ flexibility quotas, a smaller share of quota loans breached only the maximum LTV requirement.

Original source View in tracker