Fixed mortgage rates with terms ranging from one to ten years have also been reduced by 0.10 to 0.25 percentage points.
– I'm sure more banks will follow suit, said Christina Sahlberg, a savings economist at comparison site Compricer.
– SBAB is adept at adjusting interest rates in line with market conditions.
Frida Bratt, savings economist at Nordnet, believes today's announcement signals the bank's expectation of a further Riksbank (the Swedish central bank) interest rate cut in August.
SBAB's CEO, Mikael Inglander, explained the decision:
– We've seen broad declines in both shorter and longer bond periods, which affects our costs. We believe it's essential to pass these savings on to our customers.
The bank has reduced its variable mortgage rate five times this year, totaling 0.50 percentage points. Inglander indicated further reductions may follow if the Riksbank cuts interest rates as anticipated.