Norway eases loan-to-value mortgage limit to 90%

THE Norwegian government will ease its loan-to-value restriction on mortgage lending, the finance ministry said on Wednesday (Dec 4), loosening a policy that had led to a decline in the construction of new homes.

The revised rule set a maximum loan-to-value mortgage ratio of 90 per cent, up from 85 per cent previously, requiring borrowers to put up 10 per cent equity when buying a home, down from 15 per cent previously.

“The change will allow more people to enter the housing market,” Finance Minister Trygve Slagsvold Vedum said in a statement.

First introduced in 2015, the mortgage regulation aims to protect the banking system and the wider economy as well as consumers by limiting the growth in borrowing and preventing the formation of a housing market bubble. REUTERS