The Swedish Financial Supervisory Authority published updated figures showing that banks’ gross margin on variable-rate residential mortgages edged up in the fourth quarter of 2024 and encouraged consumers to negotiate with their bank if they are not satisfied with their mortgage rate. By the end of the quarter, the gross margin was 0.81 percentage points, up from 0.78 percentage points at the end of the third quarter. The measure is defined as the difference between banks’ variable mortgage lending rate and their funding cost for those loans. During the quarter, Sveriges Riksbank cut the policy rate by 75 basis points to 2.5%, lowering banks’ mortgage funding costs. Variable mortgage rates also fell, but by less than the reduction in funding costs, contributing to a slightly higher margin. For comparison shopping, the authority urged consumers to benchmark against the average rate rather than banks’ list rates, citing Statistics Sweden data showing an average variable mortgage rate for new contracts of 3.47% at the end of the fourth quarter, down from 4.21% the prior quarter.
Finansinspektionen 2025-02-12
Swedish Financial Supervisory Authority reports higher variable-rate mortgage gross margins and urges borrowers to negotiate rates
The Swedish Financial Supervisory Authority reported an increase in banks' gross margin on variable-rate residential mortgages to 0.81 percentage points in Q4 2024, up from 0.78 in Q3. This rise followed a 75 basis point policy rate cut by Sveriges Riksbank, which reduced banks' mortgage funding costs. Consumers are advised to negotiate mortgage rates and compare against the average rate of 3.47% for new contracts, as per Statistics Sweden data.