Mortgage interest is one of the biggest expenses for many households, and small changes can make a big difference in the long run. News24 have found out how you should think when you want to lower your mortgage interest rate.
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6 out of 10 households have a loan-to-value ratio that exceeds 50 percent of the home’s value
According to statistics from Statistics Sweden 6 out of 10 households have a loan-to-value ratio that exceeds 50 percent of the home’s value. This means that they have borrowed more than half of what the home costs.
According to Statistics Norway, around 8 percent have a loan-to-value ratio of 85 percent or more, which is very high. In addition, the statistics show that households with a higher loan-to-value ratio often have to pay higher interest rates on their loans. Those who have borrowed 70–85 percent of the home’s value have, on average, an interest rate that is 0.09 percentage points higher than those who have borrowed less.
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This is how you lower your mortgage interest rate – this is what you need to do
Nyheter24 has been in contact with Stefan Österbergprivate economist at County insurances. According to him, it can be good to start by looking over and going through what interest you have on your mortgage today – and then compare it with what other banks can offer.
– There are lots of comparison sites where you can see what different banks’ customers have in average interest, says Stefan Österberg to Nyheter24.
Stefan Österberg also points out that it can be good to consider changing banks, if you want to lower your mortgage interest.
– According to our surveys, 6 out of 10 are inclined to change banks, and the mortgage interest rates are the biggest reason for wanting to do so, says Stefan Österberg.
Many are inclined to change bands to lower the mortgage interest rate. Photo: Fredrik Sandberg/TT
Another smart tip is to request an amortization document from your bank. It signals that you’re considering switching banks, which usually gets them to act quickly. The banks have a great interest in keeping you as a customer, and are often prepared to offer better terms for you to stay.
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