What do the new rules mean in practical terms?
Above all, it concerns two clear changes:
The stricter amortization requirement of an additional 1 percentage point for loans exceeding 4.5 times the household's annual income will be removed.
At the same time, the mortgage ceiling is being raised from the current 85 percent to 90 percent. The effect of this is that buyers now need to make a cash deposit equivalent to 10 percent of the home's value instead of the previous 15 percent.
What do you hope to achieve with these changes?
For a first-time buyer, it is intended to make it easier as they do not need as much cash available. The fact that they do not need to amortize as much will also make it easier. Overall, it is intended to provide more mobility throughout the housing chain.
In practical terms, what does the new amortization requirement mean financially?
Of course it depends on the size of your mortgage. On a loan of two million kronor, a reduced amortization to 2 percent means a saving of 1,667 kronor per month. For twice the loan amount, 3,333 kronor.
That sounds good, where is the criticism of the change?
On several counts. Economists have warned that this will instead drive up housing prices, especially for smaller apartments, the very ones that are relevant for first-time buyers.
A concern that is also raised by KI, among others, is that a higher mortgage ceiling will contribute to young people ending up with larger loans than their assets if housing prices were to slow down or even fall.
Besides these two changes, are there any other things to keep an eye on?
Absolutely. The ability to extend your mortgage is limited. For those who want to take out an additional loan to renovate their kitchen or install a heat pump, the maximum allowed loan-to-value ratio is reduced to 80 percent of the home's value.
What happens if the apartment is revalued?
With the new rules, you are only allowed to revalue your home every five years. There are exceptions if you have made significant renovations that have changed the value of your home.
Okay, but have these changes been tried elsewhere?
Yes, in Norway. There, prices rose by just over three percent within a few months after a similar change.
This is how big a difference there will be on different loans if the amortization requirement is lowered from 3 percent to 2 percent:
1 million kronor. 833 kronor per month.
1.5 million kronor. 1,250 kronor per month.
2 million kronor. 1,667 kronor per month.
4 million kronor. 3,333 kronor per month.
Source: SEB.
