The market is pricing in a double rate cut of 0.50 percentage points by the Swedish Central Bank in November, followed by another cut in December, according to pricing.
This would push the repo rate down to 2.50 percent, from today's 3.25 percent.
The probability of this scenario has risen to 100 percent according to market pricing, from just over 80 percent a week ago, according to a compilation by SEB's economists.
And pricing on the bond market points to further rate cuts in 2025, down to 1.75 percent in December next year – that is, 1.50 percentage points below today's level.
If mortgage rates were to follow suit with a 1.50 percentage point drop, it would reduce the cost of a three million kronor mortgage by 45,000 kronor per year or 3,750 kronor per month – assuming the effect of the interest deduction is disregarded.
