Major Swedish banks quickly raised mortgage rates when market rates rose. Now that interest rates have fallen back, the cuts are being delayed - and criticism is growing of the banks' power over households.
When market rates rose in March, several Swedish banks raised their mortgage rates by 0.15 percentage points. SBAB justified the increase by stating that ”market interest rates have risen, which has led to increased borrowing costs for the bank”, reports Göteborgs-Posten (GP).
But now that the Stibor rate has fallen back, the banks have largely left mortgage rates unchanged. Göteborgs-Posten's financial writer Alexander Piauger write that the behavior is ”dishonest” and argues that customers lack real alternatives.
Banks refuse to give straight answers
When GP contacted the major banks, several did not want to be interviewed by phone about why interest rates are not being reduced. Swedbank believes that several factors affect mortgage rates.
- One is of course market interest rates. Then there's our pricing strategy as well and that's obviously a business issue, says Swedbank's press officer Love Liman Jacobsson.
SBAB's CEO Mikael Inglander at the same time referred to the bank's funding costs and the bond market turmoil.
The criticism: lack of competition
According to GP's review, the trend points to weak competition in the banking market. When interest rates are raised, it happens quickly, but when costs fall, customers have to wait.
At the same time, mortgage customers are encouraged to negotiate aggressively and compare banks more often. Critics argue that the current system favors the big banks while ordinary households lose money in silence.
Confidence in banks is already low. According to the Media Academy's trust barometer, only 34% of Swedes have great or fairly great trust in banks.
