In recent years, many mortgage borrowers have seen their interest expenses skyrocket. But with inflation under control, the Swedish Central Bank has now lowered the interest rate on several occasions – and further reductions are expected in 2025.
Several major banks believe that the policy rate will be around 1.75 percent by the summer.
That's also true if inflation were to come in a bit higher occasionally, since it's now seen as normal fluctuations, says Christina Sahlberg, economist at the comparison site Compricer.
She emphasizes, however, that forecasts are mostly about qualified guesses. Much can still affect.
Upsetting forecasts
We're a global economy affected by everything from weather to war, business leaders and heads of state, she says, mentioning, for example, the pandemic and the war in Ukraine as events that have upset forecasts.
With that said, the expected interest rate cuts have already led to the one-year interest rate for mortgages at many banks now being lower than the floating three-month interest rate.
Is it then time to lock in? Not necessarily, according to experts – since floating interest rates have historically always been profitable.
But it doesn't have to suit everyone. You may have small margins and therefore can't handle large fluctuations in interest rates. Then you might think it's worth locking in, says Robert Boije, chief economist at SBAB.
He thinks a benchmark can be that you should be able to handle an interest rate of 4 percent on average over time. On the other hand, SBAB does not expect the longer fixed interest rates to fall further.
They've already fallen quite sharply, so if you tend to want to lock in the interest rate, it might be worth it, he says.
According to Christina Sahlberg, it's just as difficult to time the right time to lock in the interest rate as it is to time a stock purchase.
Lured to lock in
According to her, there is no "normal" interest rate to base your own forecast on.
We've had negative interest rates and then we've had extremely high interest rates. The interest rate can continue to fall until autumn or it can stabilize, she says.
Christina Sahlberg reminds us that if you want to get out of a fixed-rate loan early, you have to pay interest rate differential compensation. It's also harder to move your mortgage if you get a better offer somewhere else.
Many have had it tough after this period and may not have much savings left. Then it's easy to be lured into locking in. It doesn't have to be wrong, but if you have the opportunity to have flexibility in your economy, you don't need to feel like you should lock in, she says.
