– Now that the banks are earning so well and interest rates are falling, it’s time to go to the bank and renegotiate your mortgage, says Moa Langemark, consumer protection economist at the Financial Supervisory Authority.
The so-called mortgage margin has increased by 0.03 percentage points, from 0.59 percentage points to 0.62 percentage points.
It may look like a small number, but since the banks have lent a full 4,000 billion kroner for mortgages, it still amounts to large sums.
Calculated over a quarter, it will be almost one billion kroner extra, just in increased margins, according to SVT’s calculation.
Greater margins when interest rates are low
Usually, banks’ margins are larger when interest rates are low. It may sound strange – after all, they get paid less when they issue mortgages. But that’s because their costs are falling more than revenue. Namely, banks themselves borrow money from other financial companies, right now extremely cheaply. Mortgage borrowers’ interest rates are falling, but banks’ borrowing rates are falling even more.
However, the banks have earned more than this on the mortgages for periods. In 2018, the margins were up to double, i.e. over 1.5 percentage points.
When interest rates fall, it is therefore high time for mortgage borrowers with variable loans to have a conversation with their bank, the Financial Supervisory Authority thinks. After all, the bank has more money than usual to lower your costs.
– Vote with your feet. Switch banks if you don’t get a good interest rate, says Moa Langemark, Finansinspektionen.