The hope for cheaper mortgages is great among borrowers as the Swedish Central Bank is expected to continue lowering the interest rate.
However, the bank directors do not want to promise that the mortgage rates will be lowered at the same pace.
I think they should do it, says analysis manager Tor Borg.
Things are still going well for Swedish major banks, notes Tor Borg, who is an analysis manager at Citymark Analys/Byggfakta and a former bank economist.
The interest margin, the difference between lending and borrowing rates, fell for both SEB and Swedbank, while it increased by a few percent for Nordea, although less than expected, according to the banks' latest quarterly reports.
The profit was higher than expected for SEB and Swedbank and largely in line with the forecasts for Nordea.
Lower margins
Borg also notes that there is no direct increase in mortgages.
It has not decreased, but it is increasing at a much slower rate than it has historically.
How much do banks actually earn from customers' mortgages? Hard to say exactly, thinks Tor Borg.
The margins are lower now compared to six months or a year ago, which is natural given the interest rate development.
The fact that they previously earned a lot of money on mortgages has to do with the fact that they did not earn much on deposits due to the negative interest rate, he adds.
The big question for many borrowers right now is: what will happen to the interest rates? The Swedish Central Bank expects to lower the interest rate two or three times before 2024. Expectations of lower mortgage rates have thus increased.
Difficult to predict
Nordea, Swedbank, and SEB all say that it is impossible to say how much the mortgage rates can be lowered when the Swedish Central Bank lowers the interest rate further.
When interest rates fall in society, they will also fall at the banks. We'll see exactly how it turns out when we see the changes, said Nordea CEO Frank Vang-Jensen in connection with the report release.
That mortgage rates will fall if the interest rate goes down is taken for granted by Tor Borg, but whether it will happen at the same pace as the Swedish Central Bank's interest rate is harder to say:
But it is reasonable that variable mortgage rates will fall at the same pace as the Swedish Central Bank's interest rate, as long as we don't get down to very low levels, around zero, again.
