For members


How does the cost of owning a home in Norway compare to renting?

Many point to owning a home as a wise investment. However, how does the cost of being a homeowner in Norway compare to being a tenant?

Pictured are homes in Stavanger.
High interest rates mean the cost of being a homeowner may be more expensive than renting. Pictured are homes in Stavanger. Photo by Kilian Kremer on Unsplash

To buy or not to buy – that is the question. While it seems an obvious choice, especially as Norway is a nation of homeowners, it has recently become more challenging.

The reason for this is the 12 interest rate increases since 2021. The current interest rate in Norway is four percent and is expected to peak at 4.25 percent.

Rising house prices in recent years also mean a much larger chunk of money is needed to secure a mortgage.

This effect is doubled when you consider the number of properties in Norway which belong to housing associations, meaning shared debt repayments and joint costs increase.

However, this isn’t to say things have been much rosier for tenants. Interest rates and property tax changes have increased costs for landlords. This also means fewer homes are available, and supply can’t keep up with demand.

All in all, this means that the cost of a two-room apartment in Norway is 6.1 percent more expensive than a year ago. The average cost of renting a two-room flat was 14,402 kroner per month in August, according to figures from the rental agency Utleiemegleren. The price of a detached house was 21,533 kroner per month – an increase of 14.5 percent.

In Oslo, it cost on average 16,189 kroner per month for a two-room flat and 30,422 kroner for a detached house. In Trondheim, a flat cost was lower at 11,976 kroner for a two-room apartment. Meanwhile, a place in Bergen with two rooms was around 13,512 kroner per month.

This is just the cost of rent. Tenants will likely need to pay for utilities such as energy. Depending on where they move, water and Wi-Fi may already be included. Energy bills can range from around 700-400 kroner for a small apartment each month.

When renting in a housing association, the joint costs and shared debts must be included in the rent price. This means it cannot be charged separately.
In August, the average home price in Norway was 4.54 million kroner.

If you were to buy a home for the average house price, you could afford to buy pretty much anywhere in Norway. Although, your options will be more limited in the biggest cities.

The most common deposit required in Norway is 15 percent. Currently, interest rates on mortgages are between 5 to 6 percent.

READ MORE: Are Norway’s mortgage requirements different for foreign residents?

Were you to buy a house in Norway for 4.54 million kroner with a mortgage of 85 percent over 25 years – the mortgage would cost between 22,000 and 24,900 kroner per month, depending on the rate you get.

This would cost a few thousand kroner more per month than renting a three-bedroom flat in Oslo at an average cost of 19,821 kroner each month.

Were you to extend the repayment period to 30 years, you would be paying around 21,019 kroner per month.

One thing to remember is a large number of properties do belong to a housing association. This means that you will need to factor in the average monthly costs and the mortgage. What you pay in monthly fees will depend a lot on the association.

Amenities, the size of the property you are purchasing and the overall debt of the housing association you are buying into all affect the monthly costs. When purchasing a home in the region of 4.54 million kroner, you can expect to pay between 2,000 and 4,000 kroner in monthly expenses.

Those buying a house for less will typically have much lower costs. Even for 3.5 million kroner (one million less than the national average), you will be able to find homes in Oslo and Bergen. For a mortgage of just over 3 million kroner, the average monthly mortgage costs will be between 17,815 and 19,455 kroner.

For house hunters looking to buy for a different figure, the Norwegian Consumer Council’s Finansportalen has a mortgage calculator. 

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.
For members


What will be cheaper and more expensive in Norway in 2024? 

Norway is known for its high prices. The cost of some essentials should actually fall next year. However, many things will become more expensive. 

What will be cheaper and more expensive in Norway in 2024? 

Kindergarten to become cheaper 

Parents will see their childcare bills slashed at the beginning of August 2024. The reason for this is that the maximum price for a kindergarten place, excluding food and other costs, will be lowered to 2,000 kroner per month. 

This change can save families with one child up to 12,000 kroner per year and applies to both private and public kindergartens. 

When the change comes into practice, the maximum price a family will pay for kindergarten a month will be 3,400 kroner – excluding other costs such as food.

This is because a discount is applied to the second child of the same family in a kindergarten. A family’s third child and onwards receive a free space if they attend the same kindergarten as their siblings at the same time.

Only a few years ago, the maximum price for just one child was close to 3,400 kroner per month. 

Rural areas will see an even lower cap of 1,500 kroner per month. 

Online shopping could go up

When ordering from foreign stores not signed up for the VOEC (VAT on E-commerce) scheme will need to go through customs. 

Under the outgoing rules, orders under 350 kroner in value pass through customs without duty and VAT being added. 

The changes won’t affect items bought from retailers that participate in the VOEC scheme. The new rules take effect from January 1st. 

Alcohol and tobacco prices to rise 

The cost of tobacco and alcohol will increase next year due to taxes. 

The alcohol tax will increase by 3.8 percent. The tax on cigarettes will increase by 4 percent. 

Meanwhile, the price of snus will see the biggest increase. Taxes on snus will go up by 4.3 percent. 

Airfare will become more expensive 

Flying in and out of Norway will likely become more expensive next year. This is because the fees charged to airlines to use Norwegian airports will be increased to help keep state-owned airport operator Avinor afloat. 

Industry experts believe this will lead to increased airfares as the higher costs for airlines will be passed onto passengers. 

This may be offset by a reduction in the air passenger tax. The air passenger tax is directly applied to tickets and costs 80 kroner for flights within Europe and 320 kroner for flights outside Europe. 

Cost of travelling to also change

Norway’s weak krone has dominated the headlines this year. Travelling will either get cheaper or more expensive depending on whether you will be travelling into or out of Norway. 

The Norwegian krone isn’t expected to strengthen significantly next year. This means visitors can enjoy favourable exchange rates. 

However, those travelling out of Norway will suffer from a worse exchange rate. A weak exchange rate will also impact the broader cost of living. 

Exchange rates cause a lot of inflation in Norway due to the sheer number of goods imported from abroad. 

Interest rates expected to fall 

Loan and mortgage repayments could get cheaper towards the end of next year. While interest rates will likely peak in 2023, one of Norway’s largest banks expects them to fall towards the end of 2024. 

However, the rate cut isn’t expected to happen until towards Christmas 2024. 

Certain foods could soar in price 

In order to protect Norwegian-grown foods, the duty on imported vegetables will increase next year. 

This means the price of iceberg lettuce, beetroot, turnips and potatoes could all increase next year. 

It is estimated the cost of potatoes could even double per kilo.