Swedbank is the worst in class when it comes to lowering mortgage rates when the average interest rates of the five largest mortgage banks are compared this year.
Despite the Swedish Central Bank's lowering of the interest rate by 0.25 percentage points, Swedbank has only lowered its interest rates on variable mortgages by an average of 0.19 percentage points this year.
It's only us as customers who can do something about it. Call and nag, threaten to switch and check if you can get a lower interest rate from someone else. As a customer, it's about keeping track all the time, making sure your bank is keeping up, says Christina Sahlberg, savings economist at the comparison site Compricer, on how borrowers should act to get the lowest possible interest rate on their mortgage.
A lot of clinking in the cash register
The next worst at lowering is Handelsbanken, which is the second largest on the Swedish mortgage market. Handelsbanken has lowered its average interest rate for a variable mortgage by 0.26 percentage points.
State-owned SBAB and Wallenberg's major bank SEB have simultaneously lowered the average variable interest rate on mortgages by 0.32 and 0.34 percentage points, respectively.
The difference may seem small – a few hundredths of a percentage point. But when it comes to a bank like Swedbank, with almost 1,000 billion kronor lent out in the form of mortgages, those extra interest points give a lot of clinking in the cash register, according to Sahlberg.
The banks have so incredibly many customers who don't react and then they can continue to make money on them. It's a bit unfair. It's those who are loyal and don't complain who get to pay the high interest rate, she says.
Nordea has since the turn of the year lowered its average interest rate for variable mortgages by 0.28 percentage points. But Nordea is still the bank that charges the most for its mortgages, with a variable interest rate of 4.64 percent on average in June.
Swedbank is the second most expensive, at 4.62 percent. The other three – Handelsbanken, SEB, and SBAB – had an average interest rate of just under 4.50 percent on variable mortgages in June.
Stingiest with savings interest
In the other scale of the banks, you'll find the interest rates they offer their customers on regular savings accounts. They have been lowered by 0.20-0.25 percentage points since January, according to monthly reports from the Consumers' Bank and Finance Bureau.
Handelsbanken and SEB are, after this year's reductions, the stingiest with interest rates of 1.75 percent. Nordea and Swedbank are slightly higher, at 1.80 and 1.90 percent, respectively. State-owned SBAB tops with a savings interest rate of 3.75 percent.
The lending to Swedish households with security in real estate – so-called mortgages – amounts to around 4,100 billion kronor, according to the Statistics Sweden's financial market statistics from May 2024.
Swedbank is the largest on the Swedish mortgage market, according to the latest available statistics from the Bankers' Association, which describes the situation as of summer 2023:
Swedbank: 22 percent
Handelsbanken: 21 percent
Nordea: 14 percent
SEB: 13 percent
SBAB: 8 percent
Source: Swedish Bankers' Association
What is usually called variable interest rate – in fact, a contract model where the terms are adjusted every third month – is by far the most common on the Swedish mortgage market. The proportion of those who choose variable interest rates among new borrowers was, according to the state-owned mortgage bank SBAB, in May over 90 percent, the highest proportion in 15 years.
The proportion has increased since the Swedish Central Bank, in its so-called interest rate path – i.e., the forecast for future interest rates – began to paint a scenario with more interest rate cuts after the first cut in eight years in May 2024. The interest rate path from June points to two or three cuts of the interest rate by 0.25 percentage points each during the second half of the year.
Variable mortgage rates usually follow the interest rate, both up and down. If mortgage rates were to follow the interest rate down 0.75 percentage points to the end of the year, 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.
