How much did SBAB sink interest rates?
The mortgage provider dropped interest rates on its variable mortgages by 0.15 percentage points to 4.62 percent. It dropped rates on mortages fixed between one and 10 years by between 0.10 percentage points and 0.25 percentage points.
“We know that the interest rate hikes of recent years have represented a major burden for many households, so we are pleased to be able to once again reduce our rates,” SBAB’s chief executive, Mikael Inglander, in a press message. “We dropped rates on mortgages fixed between one and five years at the start of July and now we’re dropping them across the board.”
Why is the mortgage provider sinking rates?
Frida Bratt, a savings economist at Nordnet, said that SBAB’s decision meant that it expected Sweden’s Riksbank central bank to reduce its rates further when it is scheduled to make another rates decision in August.
“My feeling is that SBAB has a tradition of following the current interest rate quite closely and sometimes to even jump a bit ahead of the curve,” she said.
Christina Sahlberg, an economist at the price comparison side Compricer, said that she expected the other banks to follow SBAB’s example over the coming weeks and months.
“I’m sure that the other banks are going to act now,” she told the TT newswire. “SBAB are always very good at adapting according to the market situation.”
Will there be more reductions in mortgage rates to come?
In the press statement, Inglander said that SBAB expected to continue reducing its rates as the Riksbank reduced its own key interest rate.
“If the Riksbank sticks to what they’ve communicated — that is to say that they reduce rates further in 2024, then we are also going to make further reductions in rates for our customers,” he said.
SBAB has reduced its flexible interest rate five time this year, bringing the total reduction to down by a total of 0.5 percentage points.
It’s not enough! And what is irksome is how incredibly slow other banks are to follow… literally the only people who benefit from high interest rates are those with significant amounts of cash in bank accounts. The rest of us pay for their profit.