Rising interest costs putting pressure on mortgagors

Mortgagors are under pressure from rising interest rates. At the same time, the majority of new mortgagors continue to have good margins in their personal finances. These are the conclusions drawn by Finansinspektionen in this year’s Swedish Mortgage Market report, which is being presented today.

An increasing number of mortgagors are feeling the pressure of the state of the economy since both interest rates and inflation have risen sharply. For many households, interest payments have become a growing expense, and for new mortgagors, 12 per cent of their disposable income on average is spent on interest rate payments. This is almost three times as high as the same figure in 2021 and the highest figure recorded in Finansinspektionen's mortgage surveys. Based on current forecasts, interest rate payments could increase to almost 16 per cent of disposable income by the end of 2023.

"Even though more are facing rising costs for their mortgages, we can see that new mortgagors in general have good margins. However, they are feeling the pressure from high inflation and high interest rates. This is forcing many to reduce their consumption and their savings," says Director General Daniel Barr.

Finansinspektionen has implemented several measures to reduce the risks associated with household borrowing, for example amortisation requirements and the mortgage cap. Because of these measures, new mortgagors have borrowed less and bought more inexpensive homes than they otherwise would have.

For households that experience financial difficulties, the banks may grant exemption from the amortisation requirement. Finansinspektionen is currently analysing how the banks are applying the exemption and will announce its findings in June 2023. In general, the exemption is being applied at a significantly higher extent today than it has been the past few years. Between September 2022 and the end of February 2023, approximately 15,000 mortgage customers received a temporary exemption from the amortisation requirement.

Swedish Mortgage Market will be presented by Director General Daniel Barr and Chief Economist Henrik Braconier at a press conference today. Updated statistics on exemptions from the amortisation requirements will also be presented today at the press conference.

Time: Tuesday, 28 March, 10 AM
Place: Finansinspektionen, Brunnsgatan 3, Stockholm.

The press conference is only open for members of the media. Notification of attendance is mandatory and must be emailed to vidar.lindgren@fi.se no later than 28 March, at 9 AM. Press ID is required.

The press release will be broadcast live via fi.se at FI Play/Videos.

About the report

Swedish Mortgage Market reflects the situation during the summer and early autumn of 2022. The objective of the report is to regularly follow the development of household borrowing since loans can pose risks to individual households, banks, financial stability and macroeconomic growth.

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