At the same time that many borrowers are burdened with high interest costs, the banks’ profit on mortgages is increasing. This is shown by new figures from the Financial Supervisory Authority.
– There is room for consumers to negotiate down their interest costs, says Moa Langemark, consumer protection economist.
At the end of June 2024, the banks’ gross margin for mortgages was 0.62 percentage points, compared to 0.59 percentage points at the end of March, recent figures from the Financial Supervisory Authority show. The gross margin is a measure that indicates the banks’ profit on loans.
– There is often scope for consumers to negotiate down their interest costs. If more bank customers are active and prepared to vote with their feet, it would likely lead to the average interest rate for mortgages being pushed down, says Moa Langemark, consumer protection economist at FI.
Higher interest costs for households
Last year, households spent three times as much of their income on interest compared to 2021, according to FI.
– FI calls on the banks to provide consumers with clearer information about the bank’s average interest rate and information before the interest rate discounts expire. This would make it easier for consumers to negotiate and compare different interest rate offers, says Moa Langemark.
The margin has been around 0.6 throughout the year. In June 2023, the figure was 0.41, which was the lowest level in over ten years. Since then, the banks’ mortgage margin has increased.
The Financial Supervisory Authority publishes data on the banks’ gross margin on mortgages four times a year. The development of the gross margin shows whether the banks’ profits on variable mortgages are increasing or decreasing – higher gross margin means higher profits and vice versa.
The purpose of producing the gross margin, according to the authority, is to give mortgage customers a basis to use in an interest rate negotiation with the bank.