More households are amortising, and they are more resilient than they were a year ago. At the same time, many households with lower loan-to-value ratios choose to refrain from amortising, confirming the need for an amortisation requirement. These are some of the conclusions from this year’s mortgage survey.
This is the fifth mortgage survey performed by Finansinspektionen (FI). The trend of a growing number of households choosing to amortise continues. Almost 4 out of 10 new borrowers amortised in 2011. Last year, that figure had risen to 7 out of 10. During the same period, amortisation also grew in size from 2 to around 3.5 per cent of household income.
Just as in previous surveys, FI sees that the lower the loan-to-value ratio of a household, the less inclined it is to amortise. A full 9 out of 10 borrowers with loan-to-value ratios above 70 per cent amortised last year. On the other hand, only 4 out of 10 households with loan-to-value ratios of between 50 and 70 per cent amortised, confirming the need for an amortisation requirement.
Although house prices continued to rise in 2014, household debt did not increase, either in relation to the value of homes or household income. The average loan-to-value ratio was, just like the year before, 67 per cent and the average debt-to-income ratio remained at around 366 per cent. Fewer than 1 out of 10 households were granted unsecured loans, and such loans accounted for less than 1 per cent of new loans.
The stress tests for the year also show that households are more resilient to tougher times than they were a year ago. More households coped with both a higher interest rate and loss of income than in 2013. Resilience has generally improved considerably compared with last year’s stress test.
At 9.30 a.m. today, FI will hold a press conference at its offices at which Chief Economist Henrik Braconier and Analyst Johan Berg will present their conclusions from the report. There will a webcast of the press conference.
