Proposal for a stricter amortisation requirement for households with high loan-to-income ratios

FI is proposing changes to Finansinspektionen’s regulations (FFFS 2016:16) regarding amortisation of loans collateralised by residential property. The regulations cover mortgages granted by credit institutions, i.e. banks and credit market companies.

FI's Board of Directors decided today on the final proposal for a stricter amortisation requirement, which has now been sent to the Government for approval.

FI is proposing a stricter amortisation requirement for households with high debt-to-income ratios (large mortgages in relation to income). According to the proposal, new mortgagors with mortgages that are greater than 4.5 times their gross income must amortise at least 1 per cent of the debt in addition to the existing amortisation requirement. 'New mortgages' means loans collateralised by a home in Sweden after the proposed regulations have started to apply. The aim of the regulation is to increase the Swedish households' resilience to macroeconomic shocks.

The new regulations are proposed to enter into force on 1 March 2018.

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