Despite stubborn media speculation about upcoming interest rate hikes, which could create a strained economy for many homeowners, the Goodbank today announced that the key rate remains at a record low. Good news for everyone with home loans and a good opportunity to build a buffer in the private economy.
The repo rate, which controls the banks’ loan rates
Has been at a record low of 0.5% since February 2015. The purpose of the low interest rate is to reach the inflation target of 2% by creating an expansionary monetary policy.
“It has taken time and much support from monetary policy to raise inflation and inflation expectations. It is therefore important that the strong Swedish economy continues to leave a mark on price developments so that inflation expectations remain rooted in the target. In order for inflation to remain close to the target, it is also important that the exchange rate of the krone is not strengthened too quickly. This could happen, for example, if the Goodbank’s monetary policy clearly deviates from the outside world, ”the Goodbank writes in a statement.
The interest rates are not expected to be adjusted until the middle of next year, as you can expect slow increases. At the end of 2019, the repo rate is expected to be 0.24% – which is still a very low level. The message gives you as a mortgagee and private person the opportunity to build up a buffer for the future.
Moving or bound – which is best?
Variable interest rates are generally more favorable than fixed interest rates in the short term, but anyone with variable interest rates on the day inflation takes off may expect significantly higher housing costs.
If you have a strained economy, it is therefore a safer card to bind your mortgage for a number of years to come – even if it costs a little more each month. The Goodbank’s new message signals that it may be a good idea to tie up the loans now, especially if you know that you will stay in your home for several years to come.
This means that you lock yourself to your bank.
Private finance editor, says in Economics Studies that it should still consider the uncertain alternative by margins:
“The alternative is to keep the variable interest rate and instead put money into a buffer saving, which may come in handy in a higher interest rate situation. Then you can continue to play the banks against each other ”.