Mortgage Rates Drop: A Prime Opportunity for Borrowers

Mortgage rates continue to fall, with several major banks now lowering their fixed rates. However, to benefit from these reductions, borrowers must negotiate themselves.

"You need to be on your toes," says Felicia Schön, a personal finance expert at Avanza.

Throughout the spring, mortgage rates have been gradually decreasing. After Trump's tariff announcement in March, the market began anticipating a cut in the key interest rate in June. This indeed happened, with a reduction of 0.25 percentage points to 2%.

This means that mortgage rates are also dropping, potentially putting extra money in the pockets of many borrowers.

On Friday, major bank SBAB announced further reductions in fixed mortgage rates by 0.10–0.15 percentage points. Handelsbanken is also lowering rates on fixed mortgages by up to 0.25 percentage points.

"It's a good time to be a mortgage borrower. During interest rate changes, more people are alert, and several players use aggressive campaigns, which pressures banks to offer lower rates during negotiations or signals that the customer is about to switch banks, just to retain their mortgage customers," says Felicia Schön, a personal finance expert at Avanza.

How to Take Advantage of the Rate Cut

As a mortgage customer, you cannot expect to automatically benefit from rate cuts, emphasizes Felicia Schön.

Major banks have their list rates, and then as a customer, you get a certain interest discount—which you must negotiate.

"You can get lower rates if you are proactive and shop around. For many, the mortgage rate is the absolute largest expense. Therefore, it's important to put in the effort and actually be willing to switch banks or negotiate hard to lower the rate.

A classic tip at the negotiation table is to ask for an amortization statement.

"It signals to the bank that you are going somewhere. Then the bank may be willing to offer a lower rate. You should also be aware of the interest rate situation and average rates and ask yourself how low a rate you can get, depending on how important a customer you are to the bank," says Felicia Schön, adding:

"You can also ask the bank: Is this really the absolute best rate you can offer me? Is there no one else getting a lower rate? Then they either have to lie or say that they can indeed go lower."

To Fix or Not to Fix?

When rates are falling, you don't benefit from fixing unless you are sensitive to economic fluctuations.

"Most people don't manage to fix the rate before it starts rising. Historically, variable rates have been the most profitable over a longer period. But if you feel you can't handle a rate increase or are sensitive to rate fluctuations, it might be a good idea to fix the rate," says Felicia Schön.

The Forecast

Felicia Schön believes we will see more rate cuts ahead, precisely because of the uncertain economic situation.

She predicts that the key interest rate will settle at a neutral rate between 1 and 2 percent, probably not lower than 1.5 percent.

"We will not see negative rates again, and I think it's good for society that borrowing money costs money. But personally, I think we will see more rate cuts during the year, at least one more. This is because the economy is incredibly weak."