This is an archived release.
Credit lines increasingly popular
Loans secured on dwellings issued by mortgage companies and banks have increased by 33 per cent since February 2006. Credit lines secured on dwellings have had the sharpest increase in this period.
Loans secured on dwellings to households, which consist of credit lines and repayment loans, have increased sharply in the last couple of years. Mortgage companies’ and banks’ total loans secured on dwellings to households amounted to NOK 1 296 billion at end-February 2008. This is an increase of NOK 322 billion, or 33 per cent, from February 2006. Compared to February last year, these loans have increased by NOK 165 billion, or 14.5 per cent.
The decrease in loans issued by banks, and the increase in loans issued by mortgage companies in the same period, is largely linked to portfolio movements from banks to mortgage companies within the same company group. Portfolio movements have become more common as a consequence of the new regulations for bonds with right of priority, which was introduced on 1 June 2007 (see box). This implies that the real growth in loans is not always reflected by looking at one of the financial institution types in isolation.
Bank loans increase the most
Bank loans secured on dwellings amounted to NOK 1 158 billion at end-February 2008. This is an increase of NOK 8.5 billion from January. The increase came after two months of decrease for such loans.
Loans secured on dwellings issued by mortgage companies amounted to NOK 138 billion at end-February 2008, an increase of NOK 1.5 billion from January. This is a sharp decline in the monthly growth compared to previous periods. From October 2007 to January 2008, the monthly growth was NOK 16 billion, or 15 per cent, on average.
The strong growth in loans issued by mortgage companies in the last quarter of 2007, and the decrease in loans issued by banks loans in the same period, is largely due to portfolio movements of loans from banks to mortgage companies. From January to February 2008, however, loans secured on dwellings increased for both banks and mortgage companies.
Credit lines behind the increase
Credit lines secured on dwellings have increased sharply since January 2006, when these loans were broadly introduced. At end-February 2008, credit lines secured on dwellings issued by banks and mortgage companies amounted to NOK 224 billion in total. This is an increase of NOK 117 billion, or 109 per cent, compared to February last year. From January to February 2008, the increase was NOK 10.5 billion. This is the fourth highest monthly growth in absolute figures ever recorded. The highest monthly growth was recorded from October to November last year, when credit lines increased by nearly NOK 12 billion.
Repayment loans secured on dwellings amounted to NOK 1 072 billion at end-February 2008. This is an increase of about NOK 48 billion, or 5 per cent, compared to February last year, but a decrease of NOK 500 million from last month.
Bonds with right of priority
A new administrative regulation regarding bonds with right of priority was introduced on 1 June 2007. The regulation applies to mortgage companies which issue bonds with right of priority in a security in a portfolio of public loans and loans secured on dwellings. The bonds are often referred to as housing bonds because they are secured in a housing mortgage portfolio and have priority over other types of debt. At present, three mortgage companies issue such bonds, but several other mortgage companies have indicated that they may issue such bonds in the future.
The statistics is now published as Banks and mortgage companies.