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.
