A study proposes that the mortgage ceiling be raised to 90 percent and that the amortization requirement introduced in 2018 be abolished.
As a complement, the study proposes a debt-to-income ratio limit that restricts the scope for how large loans a household can take, to 550 percent, i.e. 5.5 times the borrowers' gross income.
Overall, this will increase accessibility on the housing market, says Stefan Westerberg.
Today, a young adult needs a disposable income of 31,700 kronor to buy a one-bedroom apartment of 33 square meters in the Stockholm municipality. If the proposals become a reality, the same person will only need a disposable income of 27,900 kronor, according to a calculation made by Stefan Westerberg.
The easing of the amortization requirement will also benefit heavily indebted households that have had to amortize at a time when they actually needed to spend money on other things. It has become like a forced savings in already tough times.
The downside of the proposals is that they will lead to increased vulnerability to interest rate hikes and private economic changes, according to Stefan Westerberg.
If more people can buy a home, demand will increase. This will lead to rising prices, making us even more indebted. This means increased sensitivity. It doesn't just have to be about changes in interest rates. It can also be about income loss and unemployment.
At the same time, he emphasizes that changes are needed on the Swedish housing market.
But it's not certain that you solve the problems on the housing market by allowing people to borrow more money. There are a number of other things you can do. I personally like Norway's model, where they subsidize savings for home purchases.
