Student loans as equity
If you work alongside your studies, or live at home and don’t really need to take out a student loan, you should still consider this.
Are student loans as equity the market’s cheapest prime loan?
It can be smart to take out a student loan even if you have the opportunity to work part time alongside your studies, or live at home. If you want to buy a home in the future, this will be one of the most affordable prime loans you can get hold of on the market. If you do not live at home with your parents and pass your studies, up to 40 per cent of your debt is cancelled. You will be paid the basic support from Lånekassen as a loan, but up to 40 per cent can be converted into a grant. The income limit for those who receive support throughout the year is NOK 188,509 for 2020. If you earn more than that, you will receive less stipend. You cannot convert parts of the student loan into a grant if you live at home with your parents, but the student loan still has such an advantageous interest rate that you are unlikely to find a more affordable alternative to a top loan on the day you are going to buy a home.
Read more about proof of financing here
Should you put the money in a savings account, or BSU?
The advantage of putting the money in a normal savings account is that you can do whatever you want with the money after the end of your studies. Maybe then you don’t need to buy a home, maybe you want to travel, or simply just repay the loan because you don’t need the money. By depositing the money in a regular savings account or high-interest account, you are free to do what you want with the money on the day you are going to use it.
BSU
BSU is a form of savings for you who are under 34 years of age. You can save up to NOK 25,000 a year and you can deduct NOK 5,000 a year from your tax. Total savings amount is NOK 300,000.
Even in the income year in which you turn 33, you can save in a BSU account and get a tax deduction. BSU account can only be created once for each person, but you can move the account from one bank to another. In other words, you cannot have more BSU accounts. Interest on the savings amount cannot be used as part of the annual savings amount. The interest is also not taken into account when calculating the maximum savings amount. The interest cannot be withdrawn before the savings amount is used for housing. However, you can withdraw interest that accrues from and including the income year in which you turn 34. No new savings amounts can be paid in after you have started using the savings in the BSU account, nor from the year you turn 34.
Read more about First Home Loans here
Savings at BSU can be used for:
- Purchase of a new permanent home for own use (e.g. purchase of freehold home, cooperative/share/bond apartment). There is no requirement that the savings amount be used for the first home purchase.
- Purchase price for necessary land to build a home.
- Payment of interest and installments on loans on existing housing. The prerequisite is that the home has been purchased after the BSU agreement has been entered into.
- Purchase of garage/garage space.