FI wants banks to offer households individual amortisation plans. The aim is to have households make a decision about amortisation by having the banks clearly show how amortisation affects a household’s finances in the long run. FI is submitting its proposal to the Government today.
Large loans make households vulnerable and this can create risks for the economy as a whole. Since FI implemented the mortgage cap, most households amortise their loans down to 75 per cent of the value of the home. This is a positive development, but too few households are amortising loans with a loan-to-value ratio below 75 per cent.
“We believe that amortisation plans can give households a push in the right direction. We need to become better at amortisation in Sweden. It is high time to change the trend,” says Martin Andersson, Director General at FI.
FI is proposing that the banks discuss different amortisation plans with the customer. The banks should use clear calculations to show how amortisation affects the household’s finances. Finally, the bank should suggest one amortisation plan and motivate why this plan is in the customer’s best long-term interests.
FI received an assignment last spring from the Government to submit a proposal for how to strengthen the foundation for a healthy amortisation culture among households. The proposal requires an amendment to a law, which takes time to implement.
To speed up the process, FI has been in contact with the Swedish Bankers’ Association, which has announced its support for the proposal.
“We are pleased that the Swedish Bankers’ Association shares our view. This means that the banks will fairly soon offer individual amortisation plans to customers who are applying for new loans,” says Martin Andersson.