• Sweden edition
 
Middle-aged Swedes take more mortgage rate risks
Home in Ransäter, Värmland, May 2008

Middle-aged Swedes take more mortgage rate risks

Published: 13 Jan 2011 09:17 GMT+01:00
Updated: 13 Jan 2011 09:17 GMT+01:00

In addition, urban dwellers are more likely to choose shorter terms for their mortgages than the rest of the country, the study showed.

However, the decision on the duration of a mortgage is not influenced particularly by whether one lives in a house or condominium, according to SBAB.

The decision by Sweden's central bank, the Riksbank, to raise the benchmark interest rate and the expectations for more rate increases have resulted in the percentage of mortgages with the shortest term of three months falling from 90 percent in January 2010 to 72 percent last month.

"The biggest explanation for the differences between the age groups is probably related with the life cycle. In the most active working years, earnings are generally higher and people are more willing to take risks," said Tomas Pousette, chief economist at SBAB and one of those responsible for the report.

Viewed over a longer period, the three-month rate was the most profitable for most. A comparison since 1997 between bound five-year mortgage rates and three-month rates at current five-year periods showed that in 99 percent of the cases, the three-month rate was the best option.

"However, one does not have the benefit of hindsight when making these decisions. I think it is funny that the younger owners, who may be buying their first properties for themselves, are cautious," said Pousette.

Last year, the difference between long- and short-term mortgage interest rates fell, leading to loans with the shortest terms declining by about 10 percentage points across all ages, housing types and regions. However, SBAB believes that this trend has come to an end.

"We believe that longer home interest rates will rise more than short ones this year and interest will increase again for the shortest terms. However, we will not go back to the peak level in 2009," said Pousette.

TT/The Local/vt (news@thelocal.se)

Your comments about this article

Today's headlines
Science
Astronaut helps launch first student satellite
Christer Fuglesang on a previous space mission. Photo: TT

Astronaut helps launch first student satellite

Sweden's debut astronaut Christer Fuglesang is helping students at KTH Royal Institute of Technology to become the first in the country to make their own satellite and send it into space. READ  

New coalition
New coalition reveals 'compromise' budget
Prime Minister Stefan Löfven and Green Party leader Åsa Romson. Photo: TT

New coalition reveals 'compromise' budget

UPDATED: Prime Minister Stefan Löfven's Social Democrat-led coalition has revealed its first budget proposal, listing plans to spend more than 20 billion kronor. READ  

Weather
Sweden braces for ten centimetres of snow
Kiruna, in far northern Sweden, has already been hit by snow this season. Photo: TT

Sweden braces for ten centimetres of snow

Sweden's weather agency has warned that up to ten centimetres of snow are on the way for Sweden. READ  

Business and Money
Global profit boost for Handelsbanken
Handelsbanken is Sweden's second largest bank. Photo: Bertil Eriksson/TT

Global profit boost for Handelsbanken

Sweden's second-largest bank, Handelsbanken, has reported a rise in third-quarter profits, boosted by higher income from its loan book as it continues its expansion overseas. READ  

Stockholm 'sub hunt'
Sweden pulls back 'submarine' search
Navy vessels remain in the archipelago. Photo: Lars Pehrson/TT

Sweden pulls back 'submarine' search

Sweden is pulling back part of the naval operation which has been searching for a suspected Russian submarine off the coast of Stockholm for nearly a week. READ  

Julian Assange
Assange prepares for court ruling in Sweden
Julian Assange at Ecuador's embassy in the UK. Photo: Anthony Devlin

Assange prepares for court ruling in Sweden

WikiLeaks founder Julian Assange says he is "confident" his asylum status will be resolved, as he awaits an imminent ruling on his case by a Swedish court. READ  

Opinion
'Why were we kept in the dark for years?'
The submarine hunt is now in it's sixth day. Photo: TT

'Why were we kept in the dark for years?'

Military expert Johanne Hildebrandt tells The Local that the biggest question in the Stockholm submarine hunt hasn't been answered yet - why don't we know more about the "other operations" from the last few years? READ  

The Local List
Eight things to love about renting in Sweden
Apartments in Sweden are compact. Photo: Shutterstock

Eight things to love about renting in Sweden

A housing crisis means that short-term sublets are the norm in major cities and rent regulation rules are frequently flouted. But this week, The Local's decided to look on the bright side of renting an apartment in Sweden. READ  

Business & Money
Nordea banks big third-quarter profit gain
Nordea's Chief Executive Christian Clausen. Photo: TT

Nordea banks big third-quarter profit gain

Swedish bank Nordea announced on Wednesday a sharp rise in third quarter profits despite the economic slowdown and major outlays for an IT overhaul. READ  

National
Knutby priest faces early release from prison
Knutby in eastern Sweden, the scene of the murder. Photo: TT

Knutby priest faces early release from prison

A former priest in eastern Sweden who was sentenced to life in prison for organizing the murder of his wife has had his sentence reduced. READ  

RECEIVE OUR NEWSLETTER AND ALERTS
Lifestyle
Eight things to love about renting a Swedish apartment
National
Vasa ship cannon blasted in Sweden
National
Sub hunt: Day-by-day
National
Sub hunt: Stockholm islanders share their fears with The Local
Sponsored Article
The best options for oversea transfers
Blog updates

21 October

Denna & den här (The Swedish Teacher) »

"?Denna? or ?den hr?? Swedish language students often ask question about different pronouns. One pronoun that especially..." READ »

 

19 October

Getting it (Blogweiser) »

"Follow Joel Sherwood on FB Few watch baseball in Sweden. This is excellent when your team loses..." READ »

 
 
 
National
Get 20% off unique Swedish homeware
National
Dentist gives free care to Roma beggars
Business & Money
Get your own office in Gothenburg or Stockholm - free for a day
Gallery
Property of the week: Malmö
Gallery
PHOTOS: 'Foreign activity' in Swedish waters
Gallery
People-watching: October 19th
TT
Society
QUIZ: How good is your Swedish?
Lifestyle
What's on in Sweden: October 17th - 24th
Society
The nudity... and nine other things expat men notice in Sweden
Gallery
People-watching: October 15th
Gallery
Your views: Should outdoor smoking be banned in Sweden?
Business & Money
Sweden has 'large hole' in finances
Sponsored Article
Introducing... Finding a job in Stockholm
Society
Monster salmon caught in northern Sweden
Gallery
Property of the week: Lorensberg
National
Scandinavia's child bride
National
Ebola crisis: How is Sweden preparing?
Business & Money
How Sweden is becoming a cashless society
Gallery
Stockholm Burlesque Festival 2014
National
How a little red horse became a symbol for Sweden
Gallery
People-watching: October 12th
Business & Money
The hottest start-ups from southern Sweden
National
What's on in Sweden: October 10th - 17th
National
Stockholm is 'best' region for well-being
Gallery
People-watching: October 8th
National
Five facts to know about Patrick Modiano
Society
My Swedish Career: A French fashionista in Sweden
Society
Swede's anti-bully Facebook tale goes viral
Society
Have you seen Sweden's viral subway cancer campaign?
National
Isis: Swedes linked to Turkish prisoner swap
National
Should Swedes be banned from buying sex abroad?
Gallery
Fredrik Reinfeldt's leaving presents
National
Five Swedish TV shows you shouldn't miss
Gallery
A tool belt, a casserole, and a book. Fredrik Reinfeldt's parliament gifts
TT
Lifestyle
Top five winter festivals in Sweden
TT
National
Sami reindeer herders win mine reprieve
Gallery
Property of the Week: Gamla Enskede
Sponsored Article
How to catch the first lobster of the year
Politics
Ten new minister faces you should know
Tech
First womb transplant baby in world born in Sweden
Gallery
People-watching: October 5th
Team SCA
Sponsored Article
All-female SCA team takes off on Volvo Ocean Race
Latest news from The Local in Austria

More news from Austria at thelocal.at

Latest news from The Local in Switzerland

More news from Switzerland at thelocal.ch

Latest news from The Local in Germany

More news from Germany at thelocal.de

Latest news from The Local in Denmark

More news from Denmark at thelocal.dk

Latest news from The Local in Spain

More news from Spain at thelocal.es

Latest news from The Local in France

More news from France at thelocal.fr

Latest news from The Local in Italy

More news from Italy at thelocal.it

Latest news from The Local in Norway

More news from Norway at thelocal.no

979
jobs available
Swedish Down Town Consulting & Productions
Swedish Down Town Consulting & Productions is an innovative business company which provides valuable assistance with the Swedish Authorities, Swedish language practice and general communications. Call 073-100 47 81 or visit:
www.swedishdowntown.com
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
http://psdmedia.se
If you want to drink, that’s your business.
If you want to stop, we can help.

Learn more about English-language Alcoholics Anonymous in Sweden. No dues. No fees. Confidentiality assured.
AA-EUROPE.ORG/SWEDEN