High debt can mean risks for individual households, banks, financial stability and macroeconomic development. The mortgage survey serves as an important basis for the assessment of the risks associated with household debt.
Household debt has risen faster than household disposable income for a long time. One important reason for this is that house prices have been increasing rapidly. To reduce the risks associated with household debt, FI has taken a number of measures to increase household resilience. In order to further strengthen the resilience of households, FI introduced a stricter amortisation requirement that went into effect on 1 March 2018.
The increase in the average loan-to-income ratio slowed in the 2018 survey. The percentage of borrowers who have a high loan-to-income ratio decreased as well. This report shows that the stricter amortisation requirement contributed to this development. New mortgagors who were subject to the stricter amortisation requirement borrowed less and purchased less expensive homes than what they would have done without the requirement. However, the average loan-to-value ratio of new mortgagors increased in the 2018 survey after having decreased for several years. The percentage of new mortgagors with a high level of debt in relation to their income or the value of their home continues to be high.
The percentage of households that amortise their mortgages has also increased over a period of several years partly due to the stricter amortisation requirement. The size of the amortisation payments increased as well, and more new borrowers with a high loan-to-income ratio amortised in the 2018 survey.