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It should be easier for mortgage customers to understand what they are paying for. Finansinspektionen (FI) is proposing to the Government today that banks should clearly explain their interest rates to their customers and at the same time show the costs of the mortgage rates they are offering.
Broadcast of press conference (in Swedish)
For the past one and a half years, FI has been reporting on the banks’ mortgage margins with the aim of increasing insight into mortgage rates. This reporting has not created the transparency that FI had hoped for. Therefore, FI is proposing that the banks must explain the interest rate they are offering each customer. This explanation shall include both the bank’s actual average mortgage rate and the bank’s costs for the mortgage.
The banks shall also explain how factors related to the individual mortgage holder affect the mortgage rate. In addition, the banks shall clarify how much the other services/products they are offering in conjunction with the mortgage negotiation will cost the customer and not just the discount that accompanies these services/products.
Increased insight decreases the disadvantageous position that many mortgage customers find themselves in with regard to information and knowledge. An improvement in transparency also prevents the banks from transferring the entire cost for a more stable financial market to their mortgage customers.
FI’s quarterly reports on the banks’ interest rates and lending show that the growth in mortgage margins has slowed since the beginning of 2013 and margins decreased during the second quarter of the year. After all mortgage-related costs are deducted from the lending rate, the margin is 0.57 percentage points.
Malin Omberg, Executive Director of the Economic Analysis Office, and Head of Division Magnus Karlsson will answer questions about the proposal today at 10:00AM. The press conference, which will also be broadcast online, will be held at FI's premises at Brunnsgatan 3. Please note: The press conference will be held in Swedish.
