New amortisation requirement

In light of concerns around household debt levels, Financial Markets Minister Per Bolund announced on Thursday that tougher amortisation requirements will be introduced for homeowners as of 1 March 2018. All new mortgage holders who borrow more than 4.5 times their gross income will have to amortise at least 1% of the debt, in addition to the existing requirement.

The new requirement will have the most impact in Stockholm and Gothenburg, where property prices are highest. In Stockholm, 30% of all new mortgage holders will be affected.

Elisabeth Svantesson, the Moderate spokesperson on economic policy, is critical, pointing out that house prices are already falling and that such a measure could lead to a further drop in prices. She calls for major reform of the housing market instead.

Andreas Hatzigeorgiou, chief economist at the Stockholm Chamber of Commerce, believes the new requirement will do more harm than good and curb growth in the region.