Swedens Policy Rate

Riksbank's Decision: Policy Rate Remains at 1.75 Percent in November

The Riksbank has announced that the policy rate (repo rate) will remain unchanged at 1.75 percent also in November 2025. The decision means that interest rates will stay stable for both households and businesses after several reductions earlier this year.

Today's Interest Rate Announcement

The policy rate remains at 1.75 percent, which is the same level as the previous month. The most recent change occurred at the end of September, when the rate was lowered from 2.00 percent to the current level. The Riksbank justifies its decision by noting that inflation according to KPIF remains slightly above the target, but the overall trend has stabilized. The latest KPIF figures show 3.1 percent in September, a marginal decrease compared to previous months.

Impact on Households

An unchanged policy rate means that mortgage rates and personal loans will remain at current levels. For new mortgages, the rate is often calculated as the policy rate plus one percentage point, resulting in an estimated mortgage rate of around 2.75 percent. For personal loans, the markup is usually about 2.5 percentage points, leading to an interest rate of approximately 4.25 percent.

• Mortgage of 1 million SEK: 2.75 % results in 22,917 SEK in annual interest costs (1,910 SEK/month).
• Mortgage of 3 million SEK: 2.75 % results in 68,750 SEK in annual interest costs (5,729 SEK/month).
• Mortgage of 5 million SEK: 2.75 % results in 114,583 SEK in annual interest costs (9,548 SEK/month).

Since the rate remains unchanged, the monthly costs are the same as the previous month. Households with variable loans will therefore see no change in their interest expenses this month.

Historical Development

Throughout 2025, the Riksbank has lowered the policy rate in several steps. At the start of the year, the rate was 2.5 percent, but it has gradually decreased: to 2.25 percent in May, 2.0 percent in June, and to 1.75 percent at the end of September. These cuts have been driven by inflation, according to both KPIF and CPI, approaching the target and stabilizing at lower levels than in previous years.

The latest KPIF figures show an inflation rate of 3.1 percent in September, while CPI stands at 0.9 percent, indicating that inflationary pressures have decreased significantly compared to the peaks in 2022 and 2023.

Forward Look and Forecast

The Riksbank’s decision to keep the policy rate unchanged signals that they are awaiting further developments in inflation before considering new adjustments. KPIF inflation has remained stable between 2.3 and 3.2 percent in recent months, but still exceeds the inflation target of 2 percent. If inflation continues to decline, the likelihood of future rate cuts increases, but uncertainty remains high regarding prices for food, energy, and fuel.

A stable policy rate can help dampen price increases for everyday goods and services, although other factors such as international energy prices and exchange rate movements also play a role.

Frequently Asked Questions About the Policy Rate

• What is the policy rate?
  The policy rate, or repo rate, is the interest rate that the Riksbank charges when lending to banks, and it influences the overall interest rate level in the economy.
• How does the policy rate affect mortgage rates?
  Changes in the policy rate impact banks' borrowing costs, which in turn influence the interest rates offered on mortgages and personal loans.
• What determines the Riksbank’s decision on the policy rate?
  The Riksbank primarily considers inflation developments and the economic outlook when deciding whether to raise, lower, or keep the policy rate unchanged.
• How often does the policy rate change?
  The Riksbank makes decisions about the policy rate approximately every other month but can change it more frequently if needed.
• Why is inflation important for interest rates?
  High inflation can lead to interest rate hikes to curb price increases, while low inflation may justify rate cuts to stimulate the economy.