Aggregated News From Investment Management Regulators

Banks may now grant amortisation exemption


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FI’s Board of Directors has decided that the proposal communicated on 2 April will go into effect as of today. This means that banks will now be able to grant both new and existing mortgagors exemption from the requirement on amortisation. The exemption gives mortgagors greater financial manoeuvrability in these uncertain times during the spread of COVID-19.

Following the decision by FI’s Board of Directors, mortgage firms, as of today, are able to grant both new and existing mortgagors a time-limited exemption from the requirement on amortisation. The exemption applies to amortisation payments through 31 August 2021. For new mortgagors, the bank must ensure in its credit assessment during the lending process that there is capacity to make amortisation payments even if an exemption is granted. FI will communicate no later than at the end of April 2021 whether this date will continue to apply or if the circumstances prevailing at that time will require an extension.

The possibility for mortgagors to be exempt from amortisation payments gives them greater financial flexibility. When banks allow amortisation easements for their mortgage customers due to the severe downturn in the Swedish economy in accordance with the new general guidelines, this does not mean that these loans must subsequently be viewed as loans with increased credit risk.

Regulator Information

Abbreviation: FI
Jurisdiction: Sweden

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