Handelsbanken Ser Rentekutt I Juni – E24

What Handelsbanken Predicts for Norway’s Mortgage Rates in 2025

Swedish‑owned Handelsbanken’s latest regional‑network report warns that the Norwegian central bank may still be on a path to lower rates, but it sees two cuts only later in 2025 – not the early‑March move many market participants hoped for.

Senior economist Jeanette Fjære‑Lindkjenn of DNB Carnegie told E24 that the probability of a March cut is “still low,” even though a Norges Bank‑driven “lower rate curve” has been hinted at in the recent regional‑network analysis.

Housing‑Price Outlook: 6 % Growth Nationwide, 5 % in Oslo

The bank expects a **6 % annual increase** in Norway’s average house price in 2025, driven by a tightening supply side. Fewer homes for sale mean that even modest demand can lift prices further.

In the capital, the picture is a little more nuanced. Oslo’s price growth is projected at 5 % for the same year, slightly lagging the national average. The temporary slowdown is linked to a surge in the supply of second‑hand apartments – a result of professional investors downsizing rental portfolios as high borrowing costs and operating expenses erode rental profitability.

Handelsbanken believes this extra supply will soon “ebb out,” after which Oslo’s price momentum should **outpace the rest of the country** again.

Why Two Rate Cuts Could Add 10 % to House Prices

Handelsbanken’s historical analysis suggests that **two additional cuts** in the coming year could lift home values by roughly **10 %** over the medium term. The logic is simple: lower borrowing costs boost buyer purchasing power, while the existing “under‑priced” inventory finally catches up with demand.

Even though the bank acknowledges that the full effect of the two previous cuts (2023‑24) hasn’t been fully felt yet, the upcoming relief could be a game‑changer for the market.

Regional Flavors: Stavanger, Bergen, and Beyond

Beyond Oslo, the oil‑rich cities of **Stavanger** and **Bergen** are expected to see a “more normal” price trajectory in the coming years. After a strong 2025 surge, Handelsbanken nudges its forecasts upward, citing a milder than anticipated slowdown in offshore investment returns.

These regional nuances matter for investors who diversify across Norway’s varied housing markets.

What This Means for Borrowers and Investors

• Borrowers: If you’re planning a mortgage, prepare for the possibility that rates stay above 3 % until late 2025. Lock‑in rates now or consider a variable product with a cap.
• Investors: Anticipate a modest rebound in property values, especially in Oslo and the east coast, once the supply dip subsides.
• Renters: Expect rental prices to stay elevated as landlords adjust to higher financing costs.

Related Reading

Explore more on the topic:

• Norway’s Mortgage Market: Trends and Projections
• How Norges Bank’s Rate Cuts Influence Real Estate
• Oslo Housing Demand in 2024: A Deep Dive

FAQ

Will there be a rate cut in March 2025?

Handelsbanken believes a March cut is unlikely; the earliest expected reduction is later in the year.

What is the expected national house‑price growth for 2025?

Approximately 6 % year‑on‑year, according to Handelsbanken’s forecast.

How much could two more rate cuts boost property values?

Historical data suggests a potential 10 % increase in house prices over the medium term.

Why is Oslo’s price growth slower than the national average?

Increased supply of used apartments, driven by professional investors liquidating rental assets, temporarily dampens price growth.

What is the projected “rate floor” by the end of 2026?

Handelsbanken forecasts a floor around 3.5 %, slightly above Norges Bank’s target of 3.25 %.

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