So you should think about your mortgage

The Swedish Central Bank is opening up for three further interest rate cuts this year. Something that will make a difference in the wallet, according to savings economist Shoka Åhrman. But for now, it's too early to tie down the interest rate, she says.

» Updated: September 06 2024

» Published: June 27 2024

So you should think about your mortgage
Photo: Jessica Gow/TT

The Swedish Central Bank is opening up for three further interest rate cuts this year. Something that will make a difference in the wallet, according to savings economist Shoka Åhrman.

But it's still too early to tie down the interest rate, she says.

The decision to keep the repo rate at 3.75 per cent was expected. However, The Swedish Central Bank did open up for three further interest rate cuts this year.

It's clear that it will be noticeable already now if we get a total of three cuts, continues Shoka Åhrman, savings economist at SPP.

But it's not until the end of the year and next year that it will really have an impact on wallets.

If mortgage rates follow the repo rate down by 0.75 percentage points – it would reduce the interest cost for a mortgage of three million kronor by 22,500 kronor per year or 1,875 kronor per month, if you disregard the effects of interest deductions.

"Don't tie everything up"

And if you're going to the bank to negotiate your interest rate, Shoka Åhrman believes it's primarily the banks' fixed interest rates that you should keep an eye on.

It shows what other customers are paying.

At the same time, the question of fixed or variable mortgage rates is highly relevant for those whose loan may be expiring or someone who has just bought a new home. Shoka Åhrman believes it's generally too early to tie down the interest rate.

If you have your first loan, maybe it's not the time to tie everything up here and now. But at the same time, we also see that fixed-rate loans can sometimes be lower than variable rates.

So you can start tying up parts of the interest rate. But I would say, don't tie up for too long just yet.

Keep an eye on fixed interest rates

Given that The Swedish Central Bank has opened up for another interest rate cut this year, Shoka Åhrman believes it may be a good idea to keep an eye on how fixed-rate loans are in relation to variable rates in the coming period.

At the same time, Shoka Åhrman wants to clarify that we won't get the same low interest rate level as before the pandemic.

We won't get back there for many years. So you shouldn't wait too long if you're thinking of tying up the interest rate.

According to SBAB, over 90 per cent of all new mortgage borrowers on the mortgage market in April chose a three-month interest rate.

Tags

TTT
By TTThis article has been altered and translated by Sweden Herald

More news

EU Stands Firm Against Trump's
2 MIN READ

EU Stands Firm Against Trump's Tariff Threats, Says Swedish Minister

Latvia Secures 2.1 Billion Kronor
1 MIN READ

Latvia Secures 2.1 Billion Kronor Deal with Saab for Air Defense Systems

Renault Acquires Full Ownership of
1 MIN READ

Renault Acquires Full Ownership of Renault Nissan Automotive India

1,700 Jobs Saved as Northvolt
2 MIN READ

1,700 Jobs Saved as Northvolt Navigates Bankruptcy in Sweden

Swedish Pension Saver Loses Appeal
1 MIN READ

Swedish Pension Saver Loses Appeal in Falcon Funds Fraud Case

Huawei Reports First Quarterly Loss
1 MIN READ

Huawei Reports First Quarterly Loss in Years Following Sanctions

France Fines Apple 150 Million
1 MIN READ

France Fines Apple 150 Million Euros for Competition Violations

Maurel & Prom Shares Drop
1 MIN READ

Maurel & Prom Shares Drop 15 Percent After Venezuela License Revoked

Norwegian Oil Fund Invests 1.4
1 MIN READ

Norwegian Oil Fund Invests 1.4 Billion Euro in Offshore Wind Projects

Sweden's Wage Talks Reach Critical
1 MIN READ

Sweden's Wage Talks Reach Critical Stage as Deadline Looms

Sweden Leads Nordic Region in
1 MIN READ

Sweden Leads Nordic Region in Money Laundering, Report Finds

Swiss Varo Energy to Acquire
1 MIN READ

Swiss Varo Energy to Acquire Swedish Fuel Company Preem

German Inflation Drop Signals Potential
2 MIN READ

German Inflation Drop Signals Potential ECB Rate Cut in April

Half of Retrained Workers Shift
1 MIN READ

Half of Retrained Workers Shift to New Industries, CSN Reports

EQT-Backed Omega II Bids 54.9
1 MIN READ

EQT-Backed Omega II Bids 54.9 Billion Kronor for Fortnox

Food Prices Continue to Climb,
3 MIN READ

Food Prices Continue to Climb, but Major Increases May Be Over

Stockholm Stock Exchange Drops as
2 MIN READ

Stockholm Stock Exchange Drops as Trump's Tariff Plans Rattle Markets

Tokyo Stocks Drop Sharply as
1 MIN READ

Tokyo Stocks Drop Sharply as Trump Tariffs Loom

Trump and Starmer Discuss Progress
1 MIN READ

Trump and Starmer Discuss Progress on US-UK Trade Deal

Håkan Samuelsson Returns as Volvo
2 MIN READ

Håkan Samuelsson Returns as Volvo Cars CEO to Drive Electric Future

Security Fund Reports Fewer Layoffs,
2 MIN READ

Security Fund Reports Fewer Layoffs, Sees Hope for Skilled Workers

South Korea, China, Japan Collaborate
1 MIN READ

South Korea, China, Japan Collaborate to Boost Free Trade

Trump's Diversity Order Faces Pushback
1 MIN READ

Trump's Diversity Order Faces Pushback from European Companies

Sweden Seeks to Shield Key
2 MIN READ

Sweden Seeks to Shield Key Goods from EU-US Tariff Clash

Weekend Push for New Industrial
2 MIN READ

Weekend Push for New Industrial Agreement as Deadline Looms

Swedes Opt for Europe as
3 MIN READ

Swedes Opt for Europe as US Travel Bookings Drop 30 Percent

Energy Efficiency Boosts Villa Prices
1 MIN READ

Energy Efficiency Boosts Villa Prices in Sweden's Real Estate Market

Elon Musk's XAI Acquires Platform
1 MIN READ

Elon Musk's XAI Acquires Platform X in Major Tech Move

Inflation Concerns Drag Down Wall
1 MIN READ

Inflation Concerns Drag Down Wall Street Indices

Sweden Seeks New Investors for
1 MIN READ

Sweden Seeks New Investors for Bankrupt Northvolt Battery Firm

US Inflation Surprises with Higher
1 MIN READ

US Inflation Surprises with Higher Than Expected February Rate

Li Ka-Shing Halts Sale of
1 MIN READ

Li Ka-Shing Halts Sale of Panama Canal Ports Amid Beijing Pressure

Princess Madeleine Addresses Criticism Over
2 MIN READ

Princess Madeleine Addresses Criticism Over New Skincare Venture

Stockholm Stocks Slide 4.5 Percent
1 MIN READ

Stockholm Stocks Slide 4.5 Percent in a Week as US Inflation Hits

French Inflation Dips Below Expectations,
1 MIN READ

French Inflation Dips Below Expectations, Impacting ECB Decisions

Cautious Consumer Spending Sees Slight
1 MIN READ

Cautious Consumer Spending Sees Slight Uptick in Sweden's Retail Sales

SSAB Faces Financial Supervisory Authority
1 MIN READ

SSAB Faces Financial Supervisory Authority Probe Over Reporting Rules

79,000 Swedes Face Student Debt
1 MIN READ

79,000 Swedes Face Student Debt with Enforcement Authority in 2024

Royal Expert Questions Princess Madeleine's
3 MIN READ

Royal Expert Questions Princess Madeleine's Skincare Venture

Gold Prices Reach New Heights
1 MIN READ

Gold Prices Reach New Heights as Trade Tariff Concerns Grow