Today’s article I am focusing on Sweden interest rates. However, it is relevant to most of the countries in current situation.
I can probably state that the interest rate peak has now been reached. But what will the new norm really be when it comes to mortgage interest rates. What can we who own a home with a loan actually count on in the longer term
Mortgage interest – The new normal
If the interest rate peak has now been reached, the policy rate has landed at 4% and the variable mortgage rate at just under 5%. The Riksbank also believes that this is the best and that several reductions are now on the way.
If we look at how it looked before the interest even started to rise (below the zero interest rate), you could easily get a loan with 1.5% interest. Unfortunately, that time is over and we can hardly expect to get there.
Everyone has different theories about where the interest rate will level off and how quickly it will happen. The Riksbank predicts that the key interest rate will have to go down to 2.5% before one is satisfied, which then results in a mortgage interest rate of approx. 3.5% variable . In such cases, that figure will be reached in two years’ time.
If we look at what the financial analysts have for forecast, it is also a key interest rate of 2.5%, but there they think that that level should be reached by the end of 2025.
The interest rate in the longer term
What will the interest rate look like in the even longer term?
Well, in the Riksbank’s monetary policy report it was actually highlighted that the global trend of lower interest rates is likely to continue. Apparently it is also supposed to include climate threats, AI technology, conflict-ridden global economy, etc.
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