Several major Swedish banks have raised their variable mortgage interest rates despite the Riksbank not yet increasing the policy rate. 15 percentage points, and Danske Bank also increased its variable mortgage rate. 75 percent.
The next interest rate announcement from the Riksbank is on May 7, and the market currently expects three policy rate increases this year. Variable mortgage interest rates are usually directly controlled by what the Riksbank does. In the UK, the mortgage market has seen rapid rate increases and shrinking product availability.
51 percent in little more than three weeks. 53 percent. 9 percentage points more expensive.
Barclays, HSBC, Lloyds Bank, NatWest, and Santander have all raised mortgage rates since the beginning of March. There has been a dramatic reduction in affordable UK mortgage deals and overall product count. The pool of sub-4% fixed mortgage deals has nearly dried up, with only nine such deals available on Tuesday morning compared to 490 on March 9, and there were 689 fewer mortgage products on the UK market on Tuesday morning compared to March 9.
I don't think politicians should decide the price of goods, not even money. I understand it may sound tempting, but the historical experiences of how it affects the market long-term are discouraging.
75% in December 2025, and the Bank of England is due to make its next base rate announcement on Thursday. The war in the Middle East has stoked inflation fears, leading to rising swap rates and higher mortgage rates. Petrol prices in the UK have climbed 12p per litre to over 144p per litre since hostilities began in the Middle East.
Iran rejected a US peace proposal as 'excessive' and issued five conditions to end the conflict. In Sweden, political reactions have intensified, with Finance Minister Elisabeth Svantesson criticizing the banks as 'reality-detached'. The Left Party demands government intervention through state-owned bank SBAB to pressure rates down, with leader Nooshi Dadgostar stating this position.
SBAB explains that market rate increases force higher borrowing costs, stating in a press release that market rates have risen, leading to increased borrowing costs for the bank. Former US President Donald Trump says he could consider 'taking the oil in Iran' as part of his war strategy against the country. Trump says the US is now negotiating both directly and indirectly with Iran, and he believes the talks are going 'extremely well', adding that he believes the countries will reach an agreement 'very soon'.
The implications of banks' actions on the Riksbank's May 7 decision are a key focus, as these rate hikes could influence the central bank's policy stance. Several unknowns persist, including when the current wave of mortgage rate increases in the UK and Sweden will calm down. Additionally, why banks are not similarly raising interest rates on savings and transaction accounts in response to market rate increases remains unclear.
Further unknowns include Iran's specific conditions for ending the conflict and how they might affect global markets, as well as the exact impact of the Middle East conflict on swap rates and inflation projections in the UK and Sweden.