Swedish government proposes loosening up mortgage rules
The Swedish government and the Sweden Democrats have proposed reducing the country's amortisation requirement for mortgages as well as lowering the necessary size of a deposit from 15 percent of the property's value to 10 percent.
Advertisement
A softening of mortgage requirements will make it easier for young people to enter the housing market, the Swedish government said as it presented the proposal.
The government also hopes that the proposed measures will reduce the number of people taking out expensive consumer loans to finance a property purchase.
READ ALSO: How a new proposal could make it easier to get on the Swedish housing ladder
"It is fundamentally healthy to own your own property, but unhealthy to have a consumer loan," financial market minister Niklas Wykman said at a press conference. "This will help people to cut their consumer loans and borrow more using their property as security."
Wykman said that the government believes this could lead to higher property prices in the short term, with a greater supply of homes in the long term.
The parties also proposed changing the amortisation requirement, abolishing the rule that households with mortgages more than 4.5 times their income have to amortise an extra percent on their mortgages, arguing that this will lower the threshold for accessing the housing market while also improving household finances.
Sweden's base amortisation rule, which requires mortgage holders to amortise one percent of their mortgage per year if their mortgage is between 50 and 70 percent of the value of the property, or two percent for loans over 70 percent, will remain the same.
The Riksbank central bank and the Financial Supervisory Authority have been critical of the planned changes to the rules, with their objections including concerns that they will lead to increased household debt, thereby affecting Sweden's economic stability.
Advertisement
Wykman said the goal of the new proposal is to 'protect a healthy amortisation culture without putting up unnecessary barriers'.
'You need different types of rules to make sure that debt doesn't take off in a way which would be unsustainable for households and for the economy,' the minister said.
'Our starting point is that you should pay back your debts – a loan is a loan.'
The new rules have a proposed implementation date of April 1st, 2026.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Local Sweden
4 hours ago
- Local Sweden
Fit in or stick out? How Sweden changes you
This week: 25 year of the bridge between Sweden and Denmark, and how moving to Sweden changes you. For Membership+ subscribers: Swiss risk losing right to permanent residency, and study shows which nationalities contribute most to the economy. Advertisement In this week's episode we talk about the bridge between Denmark and Sweden and how it means a lot more to one of our panelists than the sore feet she got after running across it. We also discuss what foreigners do to fit in in Sweden and why some people push back against assimilation. For Membership+ subscribers we examine how Sweden appears to have accidentally proposed blocking Swiss people from permanent residency. Last, but certainly not least, we dig into an eye-opening report breaking down immigrants' contribution to Swedish society by nationality. Host Paul O'Mahony is joined this week by regular panelists Becky Waterton and Richard Orange. Advertisement Here are links to some of the topics discussed in the episode: Sweden and Denmark Reader insights Immigration You can listen to the free episode here: Or follow Sweden in Focus wherever you listen to podcasts. Advertisement Get Membership+ to listen to all The Local's podcasts Sign up now and get early, ad-free access to a full-length episode of the Sweden in Focus podcast every weekend, as well as Sweden in Focus Extra every Wednesday. Please visit the link that applies to you and get a 40% discount on Membership+ Read more about Membership+ in our help centre. Already have Membership+ but not receiving all the episodes? Go to the podcast tab on your account page to activate your subscription. Advertisement
Local Sweden
a day ago
- Local Sweden
All Swedish parties back 300 billion kronor boost to defence spending
Sweden's government said on Thursday it had gained the support of all parties in parliament for a massive boost in defence spending, as the United States pressures Europe to take more responsibility for security. Advertisement The 300 billion kronor boost over the next decade, first announced in March and due to be finalised in forthcoming budget decisions, will be the nation's biggest rearmament push since the Cold War. The Nordic country dropped two centuries of military non-alignment and applied for Nato membership after Russia's full invasion of Ukraine in 2022, becoming the alliance's 32nd member in March last year. US President Donald Trump has demanded Nato allies commit to spending five percent of GDP on defence, and members will try to reach a deal at a meeting next week. The Swedish investment ‒ which will bring defence spending to 3.5 percent of GDP by 2030, up from the current 2.4 percent ‒ will be financed through loans, Finance Minister Elisabeth Svantesson told a press conference. Flanked by government colleagues and representatives of other parties, she praised everyone for standing "united" on a plan that is expected to raise Sweden's debt-to-GDP level by three percentage points. Defence Minister Pål Jonson told the same press conference the "broad consensus" was "virtually unique" in the world. Advertisement The Nordic country drastically slashed defence spending after the Cold War ended but reversed course following Russia's 2014 annexation of Crimea. "To put it bluntly, (the investment) is also about making sure that our children and grandchildren don't have to learn to speak Russian," Svantesson said. Nato chief Mark Rutte is urging members to commit to 3.5 percent on direct military spending by 2032, and an additional 1.5 percent on broader security-related expenditure.
Local Sweden
a day ago
- Local Sweden
Sweden's Liberals propose Simona Mohamsson as party leader
The nomination committee for Sweden's Liberal Party has proposed 30-year-old party secretary Simona Mohamsson as the next party leader. Advertisement Lars Persson Skandevall, the chair of the party's nomination committee, announced Mohamsson's name at a press conference in the Swedish parliament on Thursday morning. She is expected to be formally voted into place at an extraordinary meeting of the party's regional leaders held on June 24th. "My goal is for the Liberals is to make it a party in contact with issues on the ground," Mohamsson said after the announcement. "For me this about teamwork." Mohamsson has had a meteoric career within the Liberal Party, only entering national politics as recently as April, when she took over as party secretary. Before that she has been active in youth and local politics, serving as vice chair of the party's LUF youth wing and the city councillor in charge of social services in Hisingen, a suburb of Gothenburg. Mohamsson's appointment came as many of the favourites to take the position, chief among them Sweden's current environment minister Romina Pourmokhtari and schools minister Lotta Edholm, both said they were not interested in the role. When making the announcement, Persson Skandevall said that Mohamsson was "tailor-made for the role of party leader". "Simona is fearless, clear and direct and firmly rooted in the liberal movement. We are totally convinced that she is the right person," he said. Advertisement Mohamsson has in the past been critical of the party's decision to be part of a government coalition dependent on the support of the far-right Sweden Democrats, but has recently said she has changed her mind on the issue after seeing how it has worked in practice. Mohamsson's father is an Israeli Arab born in Haifa and her mother is from a mountain village in Lebanon, close to the Israeli border. She was born in Hamburg and then moved to Överlida in the countryside south of Gothenburg when she was seven years old. The family changed their name from Mohammed to the more Swedish-sounding Mohamsson shortly after arrival in Sweden.
