It was in 2021 that inflation, in Sweden and in large parts of the rest of the world, began to rise after being at a previously low level.
At the turn of the year between 2021 and 2022, the highest inflation figure in 30 years was measured when the consumer price index landed at just over four percent.
DON’T MISS: What is inflation and why is it rising?
Photo: Henrik Montgomery/TT
The Riksbank has therefore, in recent years, raised the policy rate on several occasions and in the fall of 2023 it “peaked” at 4.0 percent. In May 2024, the policy rate was lowered by 0.25 percentage points to 3.75 percent, and then, in August, a similar reduction was made to the current rate of 3.50 percent.
– We are becoming increasingly confident that the inflation outlook looks stable, but it is based on a picture here and now. If the conditions change, we will change the monetary policy, said the Governor of the Riksbank Erik Thedéen then, according to SVT.
READ MORE: Increased probability of four interest rate cuts
Erik Thedéen. Photo: Fredrik Sandberg/TTBoendekonomen: Put pressure on the bank
When the key interest rate has been at high levels, mortgage interest rates have also skyrocketed. But with the recent interest rate cuts, it will also be easier to put pressure on the banks, according to Hypoteket.
– The last thing you should do now as a mortgage customer is to just sit still and be happy that interest rates seem to have peaked. The more customers who challenge, negotiate and question their interest rate, the more competitive the industry becomes. I know many people think that it can feel unfamiliar and a bit difficult to negotiate, but believe me, it can really be worth it. A good negotiation can lead to many thousands saved, says Claudia Wörmannhousing economist at Mortgage, i a press release.
READ MORE: This is how you are affected by the interest rate cut – they can save 30,000 this year
Photo: Fredrik Sandberg/TT
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That’s how much money you can save
The mortgage has calculated the effect, in kroner per month and year, if a household manages to negotiate down its mortgage interest rate from 4.42 percent – which was the average interest rate on 3-month mortgages in July – to 3.0 percent. The fact that 3.0 percent was chosen is due to the fact that the Riksbank, which has flagged for further reductions in 2024, stated that the key interest rate may land at between 2.75 percent and 3.0 percent at the end of the year.
So how much can one save in such a hypothetical situation? Of course, it depends on how big a mortgage you have. But this is how it looks for five different loan amounts:
Loan of SEK 1,000,000
Interest cost at 4.42 percent: SEK 3,683.
Interest cost at 3.0 percent: SEK 2,500.
Difference per month: SEK 1,183.
Difference per year: SEK 14,196.
Loan of SEK 2,000,000
Interest cost at 4.42 percent: SEK 7,367.
Interest cost at 3.0 percent: SEK 5,000.
Difference per month: SEK 2,367.
Difference per year: SEK 28,404.
Loan of SEK 3,000,000
Interest cost at 4.42 percent: SEK 11,050.
Interest cost at 3.0 percent: SEK 7,500.
Difference per month: SEK 3,550.
Difference per year: SEK 42,600.
Loan of SEK 4,000,000
Interest cost at 4.42 percent: SEK 14,733.
Interest cost at 3.0 percent: SEK 10,000.
Difference per month: SEK 4,733.
Difference per year: SEK 56,796.
Loan of SEK 5,000,000
Interest cost at 4.42 percent: SEK 18,417.
Interest cost at 3.0 percent: SEK 12,500.
Difference per month: SEK 5,917.
Difference per year: SEK 71,004.
Keep this in mind when negotiating the mortgage rate
The mortgage further lists seven points that you should keep in mind when it comes to your mortgage interest rate: