The stricter amortization requirement, which means that households must make extra amortization if the loan exceeds 4.5 times the annual income, will be abolished according to the government's proposal.
At the same time, the mortgage ceiling will be raised from 85 to 90 percent. The new rules are proposed to come into force on April 1 next year.
It is difficult for young people to enter the housing market and with the amortization rules we have today, you can have very high costs in a period of life when you may not be able to handle it very well, says Minister of Financial Markets Niklas Wykman (M).
Questioned the basis
However, Karl Walentin, visiting professor of economics at Uppsala University and member of the Fiscal Policy Council, warns of higher housing prices with the proposal.
"This will make things easier for some families with children and for some young people, but the real winners are those who already own a home. This will drive up housing prices," he says.
This, in turn, points out Karl Walentin, can cause young people to still get into trouble when they are about to buy an apartment:
When it becomes easier to borrow in several ways, housing prices will be higher, which will also increase interest costs for those who are going to buy a home, and any benefits from relaxed mortgage rules will then be very marginal.
Could it contribute to a housing bubble?
Of course, you can never know, but having more permissive lending and higher mortgage limits also increases the risk of mortgage bubbles.
A limitation
Niklas Wykman says he does not believe the new rules will affect housing prices in the long term, as according to him they are governed more by supply and demand.
In the short term, this could mean some upward price pressure. But it is impossible to imagine, based on any reasonable assumptions, that it would be so great that it outweighs the positive effects for first-time buyers and families with children, he says.
At the same time, a limitation on so-called additional loans to 80 percent of the value of the home is also being introduced, i.e. when you increase the mortgage on your existing home to, for example, carry out renovations.
The bill is now being sent for consultation to the Legislative Council and the government expects to present a bill to the Riksdag in February next year.
