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Stricter amortisation requirement for households with large debt


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Finansinspektionen’s report, Stability in the Financial System, shows that the high level of household debt and rising house prices are causing vulnerabilities to build up in the Swedish economy. FI therefore would like to introduce a stricter amortisation requirement for new mortgage holders who take large loans in relation to their income.

FI’s report, Stability in the Financial System, which will be presented today highlights that the unique combination of a strong economy and record-low interest rates are contributing to the rapid growth of household debt and house prices. House prices have increased by more than 40 per cent in three years. FI has therefore observed the build-up of vulnerabilities in the Swedish economy.

“In order to further strengthen household resilience in a future crisis, FI would like to introduce a stricter amortisation requirement for new mortgage holders who take large loans in relation to their income. The proposal will be submitted for consultation in the near future,” says FI Director General Erik Thedéen.

The proposal entails that all new mortgage holders who borrow more than 4.5 times their gross income, i.e. pre-tax income, must amortise one percentage point more of their mortgage per year than what they need to amortise today. This applies in addition to the existing amortisation rules. As a result, the most vulnerable households, i.e. those with a high level of debt in relation to both their income and the value of their home, will amortise at least 3 per cent of their mortgage a year.

Director General Erik Thedéen and Chief Economist Henrik Braconier will present the report at a press conference today, Wednesday.

Time and date: Wednesday, 31 May, 10:00 a.m.

Location: FI’s premises at Brunnsgatan 3, Stockholm.

The press conference is only for representatives from the media, but will be broadcast live on FI’s website,

Regulator Information

Abbreviation: FI
Jurisdiction: Sweden

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