The interest rates on mortgages with binding periods of 1-5 years at Danske Bank are also being lowered, but only by 0.05 percentage points.
Last week, Handelsbanken and Nordea also lowered their variable mortgage interest rates by 0.20 percentage points.
The reductions come ahead of Wednesday's interest rate decision from the Swedish Central Bank, where a 0.25 percentage point reduction in the repo rate is expected.
The variable mortgage interest rate usually follows the Swedish Central Bank's repo rate up and down.
The repo rate is expected to be lowered by an additional 0.75-1.00 percentage points this year, according to market pricing. Several heavyweight bank economists believe that a so-called double reduction of the repo rate by 0.50 percentage points may occur in November.
If the variable mortgage interest rate follows suit and is lowered by 1 percentage point, it would reduce the interest cost for a mortgage of three million kronor by 30,000 kronor per year or 2,500 kronor per month, excluding the effects of interest deductions.
