A key policy rate of 1.75 percent will remain, but the likelihood of an interest rate increase remains. That is the Swedish Central Bank's message.
In July, the average interest rate at banks for three-month variable mortgages was 2.73 percent, according to a compilation by the comparison service Zmarta.
This can be compared with 3.07 percent if you had instead chosen to fix the loan for one year, or 3.32 percent for three years.
Several banks and also the National Institute of Economic Research are now predicting several interest rate increases, in some cases up to four, over the next twelve months.
Keep your powder dry
However, Ola Söderlind believes that if you have the financial means, you should instead keep your powder dry.
You shouldn't always go by those forecasts, but be a little critical. Some, for example Swedbank, have a forecast where there won't be any increase at all until 2028. You have to look at the average of the banks' forecasts and you'll probably get pretty close to the truth, he tells TT.
Ola Söderlind points out that historically it has paid off to have variable rates, and it is often difficult to time exactly when to fix the interest rate. Currently, there is a difference of around 0.25 percentage points, i.e. an interest rate increase, between variable and one year.
So it only takes one increase for you to break even, but you should keep in mind that variable interest rates are fixed for three months and are only reset four times a year.
This means that the increases need to come quite soon and perhaps be two for it to pay off in a year.
An alternative
Ola Söderlind instead sees an alternative for households that have the financial means, namely to set aside a buffer equivalent to an interest rate increase.
My tip is not to give the bank that extra money for insurance, but save that money instead. If the Swedish Central Bank raises the key interest rate and it affects your variable loan, you have your buffer there.
Historically, it is usually said that it always pays to have variable mortgages. However, there have been exceptions, Ola Söderlind reminds us.
Those who fixed the interest rate for 5-10 years around 2019-2020 were real interest rate winners. The banks probably won't make that mistake again.
