Renegotiating your Swedish mortgage rate could save you thousands

Local Sweden

17 hours ago

Differing interest rates between Sweden's banks mean that mortgage holders could save thousands of kronor per year by switching banks or negotiating a new rate.
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Only one in five Swedish mortgage holders has negotiated a new interest rate over the past few months, and one in three think that they do not have the right skills or knowledge to do so, a study by the Swedish Financial Supervisory Authority (FI) has shown.
At the same time, there are substantial savings to be made by switching to a different bank. According to Konsumenternas.se, there was a 0.34 percentage point difference between the cheapest and most expensive mortgage banks in June, which represents a 6,800 kronor difference on a 2 million kronor mortgage.
"A lot of people could save a fair amount by sitting down, going through and comparing the options," FI consumer protection economist Moa Langemark told the TT newswire.
Despite this, few Swedes renegotiate their interest rates.
"The market would probably be more well functioning if consumers were more willing to move," Langemark said.
One think to watch out for, she added, is being encouraged to make parts of your mortgage fixed-term, as it can make it difficult to renegotiate the loan as a whole and complicates the process if you want to switch to a different bank.
"You're more tied to a specific bank, essentially," she said.
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Many also fall into the trap of looking at the so-called listränta (the advertised interest rate), when they negotiate their rate, instead of the snittränta (the average rate people were actually given in recent months). The difference between the two can often be more than one percentage point at the same bank, so the listränta should be seen more as a starting point for negotiations rather than a fixed offer.
Langemark added that you shouldn't be afraid of asking questions and be willing to switch banks if you're not happy.
"There are no stupid questions. You have every right to keep asking questions until you understand what interest rate your bank is going to offer you."
FI has also worked in recent years to implement new measures to make the process easier and more transparent for people looking to change bank. Banks must now inform customers of the date their interest rate discount is due to expire (if they have a discount), and mortgage-holders have since last autumn been able to request a digital copy of their amorteringsunderlag (foundation of amortisation).
The document details the amortisation requirements of the mortgage you want to move. This includes information on how much you already amortise, the estimated value of your property and the date when that value was set, and the size of your loan.
An amorteringsunderlag is necessary if you want to move your mortgage to another bank, so ordering one can send a message to your current bank that you're thinking of switching.
"Sometimes it's enough to just order a digital amorteringsunderlag to get your bank to contact you and offer you a better interest rate," Langemark said.