2011-04-06
PRESS RELEASE
The mortgage cap has taken root. Extremely high loan-to-value ratios are falling and banks have become more restrictive in granting high percentage loans. So report Swedish credit managers in a survey conducted by Finansinspektionen.
On 1 October 2010, FI introduced a limit on the loan-to-value ratios of homes, i.e. a mortgage cap. In order to obtain an initial overview of the effects of the change, FI surveyed the credit managers at seven Swedish banks about their experiences following the introduction of the cap.
The survey shows that the extremely high loan-to-value ratios are falling. The banks have become more restrictive in granting loans with high loan-to-value ratios and are also more clearly emphasising the importance of amortisation to their customers. However, there is still no clear increase in the willingness of customers to amortise.
The survey indicates that the regulation has had an impact. However, it should also be noted that the cap has only been in place for a short period of time and that multiple factors, such as higher interest rates and the uncertainty regarding the development of the world economy, have a major impact on household behaviour.
FI will conduct a more comprehensive evaluation of the effects of the mortgage cap during the autumn of 2011.
