The Economic Institute’s head of forecasting, Ylva Hedén Westerdahl, was a guest at SVT’s Agenda together with the Director General of the Swedish Employment Agency, Maria Mindhammar, and the head of the Swedish Financial Supervisory Authority, Henrik Braconier. And despite the fact that mortgage rates are expected to continue to rise in 2023, to levels that could end up around 4 percent for the floating rate, household margins are still sufficient to cope with the economy.
– Typically speaking, we stress test new mortgage customers with interest rates of 6-7 and most of them then have margins which mean that they are able to pay both interest and amortization and have a low consumption standard, says Henrik Braconier at the Financial Supervisory Authority.
– But that may mean that you need to cut back on the extras that you are used to consuming.
“Mortgage interest around 4 percent”
According to the Economic Institute’s Ylva Hedén Westerdahl, the mortgage interest rate may be around 4 percent in the coming year.
– Then it will perhaps come down gradually. But getting down to the levels we’ve had in recent years is not something to count on. The interest rates will probably be around 2–3 percent, she says.
But introducing general amortization relief on mortgages in order to create greater margins in Swedes’ private finances is not something that the Financial Supervisory Authority advocates.
– The problem with a general exception, which existed during the pandemic, is that it is not very accurate. In that case, we will give an amortization break to many who do not need one.
– We instead point out that you should talk to your bank to get a temporary reduction
See the full interview in Agenda on SVT Play.