"The background to the adjustment is falling market interest rates, which means that the bank's borrowing costs have decreased," Danske Bank said.
"The interest rate on mortgages with other maturities will be left unchanged," the bank added.
The adjustment means that the interest cost for a variable-rate mortgage of SEK 1 million will be SEK 42 lower per month if the effects of the interest deduction are ignored.
Danske Bank's announcement comes after competitor Nordea on Monday lowered its mortgage rates for one- and two-year fixed terms by 0.10 and 0.15 percentage points respectively.
