Higher mortgage rates with no bank fees? / News / The Foreigner

Higher mortgage rates with no bank fees?. Norwegian Central Bank and Skandia Bank in difference of opinion over charges. If you think you are getting a good deal from your bank with no charges for managing and using your account, you might want to think again. According to Jan F. Qvigstad, the Central Bank’s vice-president, what you are not being debited for in charges is put on top of the interest rate on your mortgage. Skandia Bank refutes this claim.Payment fees Whenever one pays with a card in Norway, and many do, it costs both the merchants and banks money to utilise the technology. Whereas the merchant has probably built this in to the price of the goods that are bought, the banks are left with these additional charges.

norwegian, central, bank, norway, skandia, fees, mortgage, payment



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Higher mortgage rates with no bank fees?

Published on Sunday, 17th May, 2009 at 21:29 under the news category, by Michael Sandelson   .

Norwegian Central Bank and Skandia Bank in difference of opinion over charges.

Jan F. Qvigstad
Jan F. Qvigstad
Photo: Nancy Bundt/Norges Bank


If you think you are getting a good deal from your bank with no charges for managing and using your account, you might want to think again. According to Jan F. Qvigstad, the Central Bank’s vice-president, what you are not being debited for in charges is put on top of the interest rate on your mortgage. Skandia Bank refutes this claim.

Payment fees

Whenever one pays with a card in Norway, and many do, it costs both the merchants and banks money to utilise the technology. Whereas the merchant has probably built this in to the price of the goods that are bought, the banks are left with these additional charges.

“Somebody has to cover the costs”, Qvigstad tells Dagens Næringsliv (dn.no).

“If these are not covered by fees the banks can, for example, recover their outlay by giving a lower interest rate on deposits, or a higher rate of interest on loans” says Qvigstad.

He estimates that an extra 0.1 percent is put on top of the interest rates on mortgages by banks today. This means an extra 1,000 kroner extra per year on a mortgage of 1,000,000.

Half an answer

Skandia’s head of information, Johnny Anderson, remarks that this is not true in their case, and one only has to look at other banks’ interest rates to see there is no connection. He says that Skandia is able to cover their costs associated with using the payment system by having fewer employees per customer. In addition they have neither cash point machines nor branches, and focus constantly on ways of automating where possible.

“Maybe we earn a little less per customer than the established banks that do charge fees and that have other sources of income. But like all banks, we pay for the services we use. There’s no such thing in life as a free lunch...Nobody works for free.”

Skandia Bank was the first in Norway to abolish bank charges on transactions, and the use of electronic payment-transfers is estimated to cost 7.5 billion kroner per year.



Published on Sunday, 17th May, 2009 at 21:29 under the news category, by Michael Sandelson   .

This post has the following tags: norwegian, central, bank, norway, skandia, fees, mortgage, payment.





  
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