In April 2023, the government tasked national economists John Hassler and Peter Englund and the Financial Supervisory Authority’s former director general Martin Andersson to review the mortgage ceiling and the amortization requirement.
On Monday, the proposals will be presented by Financial Markets Minister Niklas Wykman, together with the chairman of the macro-supervisory committee, Peter Englund, at a press conference.
– There is room to relax the measures. We propose a higher mortgage ceiling and a reduced amortization requirement, says Peter Englund.
Relaxed requirements
The stricter amortization requirement was introduced in 2018 and means that mortgages that exceed 70 percent of the home’s value must be amortized by at least two percent annually. The new proposal means that one percent must be amortized on 50 percent of the value.
According to today’s rules, the mortgage ceiling means that banks may not lend more than 85 percent of the home’s value. The rest must be paid with a cash deposit.
According to the new proposal, the mortgage ceiling is to be raised from 85 to 90 percent.
At the same time, a debt ratio ceiling of 550 percent of the mortgage borrower’s gross income is proposed.
The proposal is to gradually introduce the new rules.