The banks' so-called gross margin on mortgages fell during the second quarter. The margin decreased from 1.46 percent at the end of the first quarter to 1.44 percent at the end of the second quarter, according to the Swedish Financial Supervisory Authority (FI). The background is slightly lower average interest rates for customers, while the banks' own financing costs were approximately at a standstill.

From the peak in December 2017, when the margin was 1.71 percent, it has steadily declined since then.

It rhymes pretty well with the major banks' slightly shrinking profits, according to their quarterly reports. Competition has increased, the smaller players have gained market share and forced some price pressure. The fact that the demand for mortgage loans has also slowed down further increases competition.

FI: Take advantage of the opportunity to negotiate

However, historically, banks' profitability on mortgages remains good. For most of the 1990s, the average margin was between 0.5 and 1 percent, according to the Swedish Financial Supervisory Authority, which continues to encourage customers to use the opportunity to negotiate.

“The high margin on mortgages shows that there is room for bargaining for consumers, while banks can maintain a good profitability on mortgages. If consumers were to a greater extent prepared to switch banks, this would probably contribute to a decrease in average mortgage rates, ”FI writes in a comment.