Swedens Policy Rate

Key interest rate remains at 1.75 percent – The Riksbank maintains its course

The Riksbank announces that the key interest rate will remain unchanged at 1.75 percent. The decision means continued stability in interest rates for Swedish households and businesses after several months without change.

Today's interest rate announcement

The Riksbank has decided to keep the policy rate, also called the repo rate, at 1.75 percent. This is no change from the previous month. The last adjustment was in September 2025, when the rate was lowered from 2.00 to 1.75 percent. The decision is based on inflation, according to the broad measure CPI (KPIF), which has been close to the Riksbank’s target of two percent in recent months. The latest figure for December shows a KPIF inflation of 2.1 percent.

How it affects households

Since the policy rate remains at 1.75 percent, household borrowing costs also stay unchanged. Banks’ average mortgage rates tend to be about one percentage point above the repo rate, which means current mortgage rates are around 2.75 percent. For personal loans, where the markup is often 2.5 percentage points, the rate can be estimated at approximately 4.25 percent.

• Home loan of 1 million SEK: An interest rate of 2.75% results in an annual interest cost of 27,500 SEK (about 2,292 SEK/month).
• Home loan of 3 million SEK: An interest rate of 2.75% results in an annual interest cost of 82,500 SEK (about 6,875 SEK/month).
• Home loan of 5 million SEK: An interest rate of 2.75% results in an annual interest cost of 137,500 SEK (about 11,458 SEK/month).

Because the policy rate has not changed since September 2025, household borrowing costs are unchanged compared to the previous month.

History and development

In 2025, the Riksbank gradually lowered the policy rate from 2.25 percent in April to 1.75 percent in September. Since then, the rate has remained steady for several months. Inflation has also fallen back towards the target, with KPIF between 2.1 and 3.2 percent during the year. CPI inflation has been even lower, around 0.3 percent in recent months, indicating that price pressures in the economy have eased.

Forward outlook and forecast

Inflation is now close to the Riksbank’s target and shows no signs of a sharp increase. This suggests that the policy rate may remain unchanged in the near future, unless new economic risks emerge. If inflation continues to decline, a rate cut could be possible, while unexpected price increases might delay a potential reduction. Food prices, fuel, and energy have experienced moderate development over the past year, in line with overall price stability.

Frequently asked questions about the policy rate

• What is the policy rate?
  The policy rate is the interest rate used by the Riksbank to influence the general level of interest rates and thereby inflation in Sweden.
• How does the policy rate affect mortgage rates?
  When the policy rate changes, banks’ mortgage rates tend to follow, often with a markup of about one percentage point over the policy rate.
• How often is the policy rate changed?
  The Riksbank typically decides on the policy rate five to six times per year but can change more frequently if needed.
• What influences the Riksbank’s decision on the policy rate?
  The most important factor is inflation, but also the labor market, economic growth, and international factors are considered.
• What is the connection between the policy rate and inflation?
  Higher policy rates dampen inflation by making loans more expensive, while lower rates stimulate the economy and can increase inflation.