I was eating lunch outside with a couple of my coworkers the other day. While we were eating, a little brown bird flew over and hovered at eye level between the three of us for a moment, eyeing our sandwiches. One of my coworkers, a Canadian, proudly told us that he had finally signed a mortgage for a condo in nearby Ranheim.
“It’s been tough,” he said. “We have to compete with all these Norwegian college kids.” He picked off a bit of bread and held it out on an open palm, and the bird hopped right into his hand, snatched the bread, and hopped back down under a nearby table. “If you’re Norwegian, your parents can co-sign and put their house down as collateral, and then you aren’t required to put in a down payment. It’s the Norwegian hack.”
“The entire Norwegian economy is based on debt,” explained another of my coworkers, an Englishman. “There’s a wealth tax, so if you’ve got too much money, you get taxed. However, any payments towards loan interest is tax-deductible. Furthermore, your house only accounts for about ten percent of its actual value towards your net worth. It’s really quite silly, you’ve got all these young Norwegian families taking out huge loans to buy houses they really shouldn’t be able to afford, but it makes more sense economically to do that than to save your money.”
My first thought was that such a financial state is dangerous. What if an unexpected expense arises? Instead of asking the more general question, I chose a specific example. “What happens if you break your leg and suddenly have to pay $10,000 in medical bills?” I blurted out.
Everyone at the table laughed. “That’s not the way we do things here,” said the Englishman. “You’ll learn to think less like an American after a while.” He reminded me of one of my other new colleagues, who broke his ankle in a skiing accident and had to be airlifted off the mountain. He paid either nothing, or the maximum deductible, which is around 2000 Norwegian kroner ($250).