The Mortgage Market
in Sweden
September 2022
REPORT
Mortgages make up a significant percentage of the loan portfolio in Sweden and are an important
component of the household budget for many individuals. The Mortgage Market in Sweden
describes current mortgage and construction trends and how they have evolved over time.
A brief description of general economic trends in Sweden is followed by a discussion of
developments in housing construction. The second half of 2021 was marked by the recovery
of the economy after Covid-19, while the first half of 2022 was marked by extensive disruption
of global value chains and Russia’s war of aggression against Ukraine.
It is also observed that housing prices have been increasing for a number of years, but the
increasing inflation and mortgage interest rates during 2022 have resulted in decreasing
prices for both tenant-owned apartments and single-family homes.
Household indebtedness is outlined, as are implemented and proposed measures to
counteract high indebtedness. Finally, an overview is provided of the main forms of
borrowing for mortgage institutions.
Introduction
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1. The economic situation in Sweden
The recovery after the pandemic resulted in a strong increase in economic growth from spring 2021 and
the rest of the year. GDP increased by 5.1 percent in 2021. After the strong increase during last year the
economy slowed during 2022 according to NIER (the National Institute of Economic Research). The first
half of 2022 was marked by extensive disruption of global value chains and Russia’s war of aggression against
Ukraine. During the spring and summer 2022, this has resulted in high inflation, dwindling asset prices and
increasing interest rates. This has left Swedish households increasingly pessimistic about the future.
During the first quarter of 2022, GDP fell by 0.8 percent compared to the previous quarter. According to
NIER, production was held back to some extent by shortages of input goods, while domestic demand was
weak. The downturn was not reflected in the labour market, however, with employment continuing to rise
and unemployment falling. Firms report having problems finding suitable employees in most sectors and the
labour shortage is substantial.
Housing investment has been historically high during over the past two years, but the rate of construction
has started weaken during the first half of 2022. High prices for commodities and materials, combined with
rising market interest rates and falling housing prices, will result in construction continuing to decline during
the rest of 2022 and in 2023, according to NIER. However, the large number of housing starts in 2021 will
prop up investment in newbuilds in 2022. The number of housing starts has increased by 22 percent over
the last year. According to the forecast by the National Board of Housing, construction will shrink in 2022
to 58,000 dwellings, a decrease of around 14 percent compared to 2021.
The pandemic initially led to uncertainty on the housing market, although it quickly recovered. Strong
demand, above all for single-family homes and larger apartments, led to significant price increases towards
the end of 2020 and throughout 2021. The increasing inflation and in particular the increasing mortgage
interest rates during the spring of 2022 have resulted in the mortgage market starting to cool down and in
housing prices starting to fall during the second quarter of 2022.
Table 1. The NIER indicators for the Swedish economy, June and August 2022
Annual percentage change and percent, respectively
2021 2022 2023
GDP, market price 5.1 2.4 0.5
Employment 1.1 2.7 0.5
Unemployment
(1)
8.8 7.7 7.8
Commercial productivity
(2)
2.6 0.3 –0.6
CPI 2.2 7.9 4.8
Repo rate
(3)
0.0 2.0 2.0
Ten-year government bond rate
(3)
0.3 1.5 1.9
(1)
As a percentage of labour force.
(2)
Working-day adjusted.
(3)
At year-end.
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2. The housing and construction market
Residential construction peaked in 2017 with a record 64,000 housing starts, after which the rate of
construction declined for a few years. Many observers expected construction to drop further after the
outbreak of the pandemic. Instead, the demand for single-family homes and large apartments increased
during the pandemic with many people working from home, and housing starts increased to 67,600 during
2021. This represents the highest number of housing starts since 1990. During 2022, however, construction
has started to slow down and, according to the forecast by the National Board of Housing, construction
will diminish somewhat in 2022 and amount to 58,000 new dwellings, a decrease of around –14 percent
compared to 2021. This forecast is based primarily on assessments made by Swedish municipalities in the
Board’s housing market survey, taking into account factors such as current trends in prices, sales, building
permits and residential construction.
Chart 2.1. Housing starts 1980–2022
Note: The number of housing starts fell sharply in 2007. This is largely explained by the Government decision in 2006 to abolish
general housing subsidies for dwellings (multi-family homes) started after 31 December 2006. This meant that many property
developers accelerated the start of construction to begin before the end of 2006 in order to receive subsidies.
Source: Statistics Sweden and 2022 forecast from the National Board of Housing
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
■ Multi-family homes ■ Single-family homes
A significant percentage of new construction is taking place in metropolitan areas. In 2021, the Stockholm,
Gothenburg and Malmö metropolitan areas accounted for 50 percent of housing starts in Sweden. The larger
cities have accounted for 50 to 60 percent of new construction in Sweden since the mid-1990s. The change
is significant compared with 1990, when 25 percent of housing starts were in the above three urban areas. In
2018 to 2020, there was a drop in the construction figures in the larger cities and especially in Stockholm. For
a number of years, Stockholm alone accounted for 30 percent of Swedish housing starts, but in 2018 to 2020
that share dropped to around 25 percent. In 2021, the share of total construction taking place in Stockholm
increased to 28 percent.
Another change in the home construction market is that multi-family dwellings account for a larger share
of new construction. From 2010, the proportion of multi-family dwellings in relation to total housing starts
has, on average, amounted to 76 percent. During the 1980s, multi-family dwellings accounted for almost 50
percent of new construction, and during the 1990s and 2000s they represented around 60 percent of new
construction. The substantial demand for single-family homes during the pandemic, however, has led to an
increase in construction starts for one-family homes and the share of single-family homes among total housing
starts is expected to increase in 2022. One explanation for the increased demand for single-family homes
during the pandemic was need for more housing space because of increased working from home and the
sharp drop in overseas travel.
Several negative events in 2022, such as Russia’s war of aggression against Ukraine, sharply increasing infla-
tion and increasing mortgage interest rates, have created uncertainty on the housing market. Housing prices,
which increased significantly during the pandemic, have started to cool off rapidly during the spring and
summer of 2022. During the second quarter of 2022, prices of tenant-owned apartments and single-family
homes have dropped by 6.4 and 5.5 percent respectively (see Table 2).
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Table 2. Price trend for housing during the second quarter of 2022,
percentage change compared to previous quarter, percent
Q2 2022
Sweden index –5.8
Tenant-owned apartments Sweden –6.4
– Stockholm –8.2
Single-family homes Sweden –5.5
– Stockholm –7.9
Källa: HOX-index / Valueguard.
There has been a significant difference in price trends for single-family homes and tenant-owned apartments
for several years. The HOX-index (Valueguard / KTH) presents price trends for both single-family homes and
tenant-owned apartments (see Chart 2.2). For several years, the prices of tenant-owned apartments have
risen more than the prices of single-family homes, according to the HOX-index. From the beginning of 2016,
the price increases for tenant-owned apartments have slowed down significantly and, in addition, the price
increases have been lower than for single-family homes. After price decreases for both tenant-owned apart-
ments and single-family homes in 2018, prices recovered somewhat in 2019. During the pandemic in 2020
and 2021 there was a significant change in demand on the housing market in favour of single-family homes,
which was followed by significantly stronger price increases for single-family homes than for tenant-owned
apartments. As the price increases have slowed down in 2022, the difference in price trends between tenant-
owned apartments and single-family homes has also decreased.
From the end of the 1990s, housing prices in Sweden have increased almost continuously for many years
(see chart 2.3). There are a number of reasons for the price increases, including both low supply and
increasing demand. Demand has risen as a result of several factors, such as relatively favourable economic
growth in Sweden, increasing household incomes, low interest rates, good access to credit, changed tax
rules, a growing population and rapid urbanisation.
Chart 2.2. Housing prices, annual percentage change, quarterly values
–15 %
–10 %
–5 %
0 %
5 %
10 %
15 %
20 %
25 %
Tenant-owned apartments Single-family homes
Dec ’05
Dec ’06
Dec ’07
Dec ’08
Dec ’09
Dec ’10
Dec ’11
Dec ’12
Dec ’13
Dec ’14
Dec ’15
Dec ’16
Dec ’17
Dec ’18
Dec ’19
Dec ’20
Dec ’21
Source: HOX-index / Valueguard
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On the supply side, the limited housing construction relative to population growth, especially in urban
areas, has been a fundamental reason for the rise in prices. One example is Stockholm County, where
the annual net increase in population has averaged 35,000 between the years 2007 to 2019. However,
the number of housing starts has far from matched the significant increase in population. Between 2007
and 2019, only 11,000 dwellings on average were started per year (see Chart 2.4).
During 2020 and 2021, population growth slowed down significantly in Stockholm. The decreasing popu-
lation growth in Stockholm County was mainly due to changing moving patterns during the pandemic,
where a significant relocation of individuals from the County to the rest of Sweden has occurred, as well
as to diminishing immigration. The number of housing starts began to increase in Stockholm from 2013.
Housing construction has remained at a relatively high level in 2020 and 2021, at the same time as popu-
lation growth has diminished. This has meant that the supply of housing in relation to size of the popula-
tion has improved somewhat in the last two years.
Chart 2.3. Price index single-family homes, 1981=10
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
National Greater Stockholm
100
300
500
700
900
1,100
1,300
1,500
Source: Statistics Sweden
Chart 2.4. Net population growth and housing starts in Stockholm County
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
■ Housing starts Population growth, net
0
5,000
15,000
20,000
25,000
30,000
35,000
40,000
10,000
Source: Statistics Sweden
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The Swedish market is characterised by a number of conditions that reduce the risk of more wide-
spread problems on the mortgage market. One factor is that banks’ lending processes are stringent and
governed by well-functioning legislation. Banks have long based their credit decisions on the borrower’s
repayment capacity rather than the value of the collateral. There is also an efficient infrastructure, for
example in the form of a property register and good access to credit information about borrowers to
secure safe lending. The high employment rate means that it is common for each household to have
two incomes that can be used to repay the loan. The welfare system is another significant factor, since
households can maintain an acceptable financial position even in the event of unemployment or illness.
The Swedish market is also characterised by very limited speculation. The market share of buy-to-
let among housing is limited. Most Swedes regard their homes primarily as a residence and not as an
investment opportunity.
0 %
1 %
2 %
3 %
4 %
5 %
6 %
7 %
8 %
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
Sweden Denmark Finland Norway EU 27
Chart 2.5. Residential housing investments as percentage of GDP
Source: Eurostat
Housing construction fell dramatically after the crisis in Sweden in the beginning of the 1990s, as illus-
trated by Chart 2.1. From the middle of the 1990s until 2014, and again from 2019, residential housing
investments represented a lower percentage of GDP in Sweden than in other Nordic countries and the
EU average (see Chart 2.5). Even though Swedish housing investments have decreased as a percentage
of GDP from 2019 and again are below most of the other Nordic countries and below the EU average,
they remain higher than before 2014. In 2021, Swedish housing investments amounted to 5.3 percent
of GDP and the EU average amounted to 5.6 percent. This can be compared with the 2021 figures for
Germany and Finland, which had the highest rates of residential investment in the EU at 7.2 percent of
GDP. The lowest rate of housing investments is found in Greece, at 1.3 percent of GDP.
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Chart 3.1. Lending secured by housing, Swedish households,
December 2012 and June 2022
26 %
23 %
15 %
16 %
7 %
5 %
4 %
1 %
3 %
23 %
21 %
14 %
13 %
9 %
7 %
4 %
2 %
8 %
0 %
5 %
10 %
15 %
20 %
25 %
30 %
■ Dec 2012 ■ Jun 2022
Swedbank
Handelsbanken
Nordea
SEB
SBAB
Länsförsäkringar
Danske Bank
Skandiabanken
Other
Source: Statistics Sweden
3. Competition on the
mortgage market
Property lending in Sweden is, to a great extent, offered by specialised housing finance institutions
(mortgage institutions), although it is also offered by banks. As of June 2022, total lending in Sweden
secured by housing amounted to SEK 5,193 billion. Mortgage deeds serve as the primary security for
home loans and tenant-owned apartment loans from banks and housing finance institutions.
The three largest housing finance institutions are owned by Swedbank (Swedbank Hypotek),
Handelsbanken (Stadshypotek) and Nordea (Nordea Hypotek). SEB has no separate housing finance
institution and residential lending is offered directly by the bank. SBAB Bank was originally a state-
owned mortgage institution that was restructured into a bank in 2010, still fully owned by the state.
Home loans are also offered by Länsförsäkringar Hypotek and by Danske Bank and Skandiabanken,
both of which are banks. In some cases, the smaller institutions may be significant participants on the
mortgage market by virtue of relatively large market shares with respect to new mortgages.
In recent years, a number of mortgage credit companies, which fund their lending by structures of
alternative investment funds (AIF), have established themselves on the market. One example is Stabelo,
which cooperates with Avanza Bank and Nordnet Bank. Another example is Hypoteket. Mortgage
credit companies may conduct mortgage lending without a banking or credit-market company licence,
which means that they are not subject to the same requirements as banks. The new companies instead
operate on the Swedish market with a different form of licence from Finansinspektionen than banks
and credit-market companies. The new companies fund their mortgage lending by creating and manag-
ing investment products on behalf of institutional investors within the framework of an AIF. AIFs are
managed by companies connected to mortgage credit companies, which in turn lend to mortgage
borrowers. Lending by mortgage credit companies is small in relation to total outstanding housing
loans, representing 1.2 percent of the total stock in June 2022. However, the new companies are signifi-
cant competitors on the mortgage market and accounted for 4.8 percent of new lending to households
in the past year.
The market share of total lending to Swedish households secured by housing in June 2022 compared
with December 2012 is illustrated in Chart 3.1. The group “Other” includes savings banks and other
institutions (including mortgage credit institutions and alternative investment funds, AIFs).
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Chart 4.1 illustrates the quarterly growth in net lending (new lending less amortisation) for housing,
broken down into single-family homes, tenant-owned apartments and multi-family buildings. The chart
shows that net lending quarterly was relatively high between the years 2017 and 2018, standing at
between SEK 54 and 77 billion. In 2019, quarterly net housing loan growth was slightly lower, between
SEK 46 and 65 billion, above all due to lower a growth rate for loans to single-family homes. During
2020 and up until the second quarter of 2022, quarterly net housing loan growth has increased again
to between SEK 60 and 94 billion. The large quarterly net increases during 2020 and 2021 coincide
with the pandemic and the increasing demand for single-family homes. The quarterly net lending for
single-family homes has been higher during this period than before, and during the fourth quarter of
2021 alone, net lending for single-family homes increased by SEK 50 billion. Net lending during the
fourth quarter of 2021 was also high for tenant-owned apartments and multi-family homes. The overall
net increase during the fourth quarter of 2021 was SEK 94 billion, the largest increase ever for a single
quarter.
Chart 4.1. Quarterly change (net increase) in lending secured by single-
family homes, tenant-owned apartments and multi-family home
Source: Statistics Sweden
0
10
20
30
40
50
60
70
80
90
100
■ Single-family homes ■ Tenant-owned apartments ■ Multi-family homes
Jun ’17
Sep ’17
Dec ’17
Mar ’18
Jun ’18
Sep ’18
Dec ’18
Mar ’19
Jun ’19
Sep ’19
Dec ’19
Mar ’20
Jun ’20
Sep ’20
Dec ’20
Mar ’21
Jun ’21
Sep ’21
Dec ’21
Mar ’22
Jun ’22
4. Residential mortgage lending
According to Statistics Sweden’s Financial Market Statistics, total lending secured by single-family
homes, tenant-owned apartments and apartment buildings amounted to SEK 5,193 billion at the end of
June 2022. Three years ago, in June 2019, the corresponding figure was SEK 4,314 billion. Lending has
thus increased by SEK 879 billion, or 20 percent, in three years.
The rate of lending to single-family homes stood at 6.8 percent in June 2022 (see Chart 4.2). The rate
of lending to tenant-owned apartments is slightly higher than for single-family homes and amounted to
7.2 percent annually. In the middle of 2016, the rate of growth for Swedish home loans was almost 9
percent annually, subsequently slowing down more or less continuously until the beginning of 2020. The
slowdown in the home loan growth rate from 2016 coincided with the introduction by Finansinspektio-
nen of the amortisation rules for new housing loans (see part 5), which is an important explanation for
the slower growth rate.
Table 4.1. Total lending secured by single-family homes, tenant-owned
apartments and multi-family homes, SEK billion, June 2022
Single-family
homes
Tenant-owned
apartments
Multi-family
homes
Total
Households 2,667 1,383 58 4,108
Companies 115 9 961 1,085
Tot a l 2,782 1,392 1,019 5,193
Source: Statistics Sweden
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Chart 4.2. The home loan portfolio, annual percentage change, monthly values
Source: Statistics Sweden
0 %
5 %
10 %
15 %
20 %
25 %
30 %
Single-family homes Tenant-owned apartments
Dec ’02
Dec ’03
Dec ’04
Dec ’05
Dec ’06
Dec ’07
Dec ’08
Dec ’09
Dec ’10
Dec ’11
Dec ’12
Dec ’13
Dec ’14
Dec ’15
Dec ’16
Dec ’17
Dec ’18
Dec ’19
Dec ’20
Dec ’21
Chart 4.3. Outstanding mortgage loan portfolio broken down
by type of security
Source: Statistics Sweden
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
Dec ’95 Dec ’00 Dec ’05 Dec ’10 Dec ’15 Jun ’22
■ Single-family homes ■ Tenant-owned apartments ■ Multi-family homes
The home loan growth rate has started to increase again from spring 2020. The increase in lending during
the outbreak of the pandemic in Sweden in the spring of 2020 may be explained in part by the temporary
exemption from the amortisation rules on mortgage loans that was introduced in April 2020. Another
explanation for the increase is the changing demand between different kinds of housing during the pandemic
and the fact that demand for single-family homes increased significantly.
The growth rate for loans secured for single-family homes has generally been slower and more stable than
for tenant-owned apartments. Since 2016, the difference in the rate of lending between single-family homes
and tenant-owned apartments has diminished by and large continuously. The increased rate of lending for
single-family homes during the pandemic, at the same time as the rate of lending for tenant-owned apart-
ments has been stable, means that the difference in the rates of lending between single-family homes and
tenant-owned apartments almost has disappeared in June 2022.
There are a several explanations why, for a great many years, the rate of increase as regards loans for
tenant-owned apartments has been higher than for single-family homes. A couple of reasons include the
conversion of rental apartments into tenant-owned apartments, which previously took place primarily
in the metropolitan regions, and the fact that significantly more tenant-owned apartments than single-
family homes have been built over the last ten years. Additionally, prices of tenant-owned apartments
have increased more than prices of single-family homes for long periods. Chart 4.3 illustrates how the
percentage of home loans secured by tenant-owned apartments has increased since 1995.
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One reason why lending secured by tenant-owned apartments has been higher than for single-family homes
is, as mentioned above, the conversion of rental apartments into tenant-owned apartments. The proportion
of tenant-owned apartments in the new construction of apartment buildings has also been high, amounting
to around 50 percent since 2007. In 2020 and 2021, however, the new construction of rental apartments
has increased and the share of new tenant-owned apartments therefore decreased to 36 percent of newly
constructed apartments in multi-family buildings in 2021. In the mid-1990s, the proportion of tenant-owned
apartments accounted for only 15 percent of newly constructed multi-family buildings.
Chart 4.4 illustrates the change, from 1990 until 2021, in the percentage of tenant-owned apartments as
a proportion of the multi-family housing stock. Between 1990 and 2000, the percentage of tenant-owned
apartments in the multi-family housing stock increased slightly from 28 percent to 29 percent. Between
2000 and 2010, the percentage of tenant-owned apartments increased to 35 percent and between 2010 to
2021 to 38 percent.
The percentage of tenant-owned apartments in Stockholm is higher, and in 2021 the percentage of tenant-
owned apartments in the multi-family housing stock in Stockholm stood at 54 percent. In the 1990s, the
share of tenant-owned apartments in the multi-family housing stock was largely the same in Stockholm and
nationally. The share of tenant-owned apartments in Stockholm increased much faster in the 2000s than in
many other places in the country, from 34 percent in 2000 to 49 percent in 2010.
The properties in which tenant-owned apartments are located are formally owned by tenant-owners’ asso-
ciations. A resident in a tenant-owned apartment is entitled to live in one of the tenant-owners’ associations’
apartments. Since the tenant-owners’ association owns the property, any loans secured by the property
constitute debt for the tenant-owners’ association. Tenant-owners’ associations are thus significant borrow-
ers in Sweden and, in June 2022, loans to tenant-owners’ associations amounted to SEK 557 billion (secured
by the property and all the association’s other loans). By comparison, household loans secured by tenant-
owned apartments amounted to SEK 1,383 billion.
For statistical purposes, a tenant-owners’ association is categorised as a non-financial company and the
aggregated loans of tenant-owners’ associations represent 20 percent of outstanding loans taken out by non-
financial companies. The rate of lending to tenant-owners’ associations amounted to around 9 percent during
the years 2017 and 2018. Since then, the rate of lending decreased significantly until the end of 2021. In June
2022, lending to tenant-owners’ associations stood at 7.4 percent annually. Lending to non-financial compa-
nies excluding tenant-owners’ associations amounted to 13.0 percent in June 2022 (see Chart 4.5).
For the last ten years, both variable and initial fixed housing interest rates have declined (see Chart 4.6). In
the longer term, too, interest rates have fallen. Until the beginning of 2022 the initial fixed rates have dropped
to the lowest levels since at least 1985. Variable interest rates are also at historically low levels. From
mid-2015, mortgage interest rates and especially the variable mortgage interest rates and initial fixed 1–5 year
rates have levelled out. The low interest rates have, according to most observers, been an important factor
behind the relatively high lending rate over the last several years. The spread between variable and initial fixed
mortgage rates has also been historically low.
Chart 4.4. Share of tenant-owned apartments in multi-family homes
Source: Statistics Sweden
0 %
10 %
20 %
30 %
40 %
50 %
60 %
1990 2000 2010 2021
■ Stockholm ■ National
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Chart 4.6. Lending rates to households for housing loans, new loans.
Dec’ 2005 – June 2022, broken down by interest term
Source: Statistics Sweden
0 %
1 %
2 %
3 %
4 %
5 %
6 %
7 %
Dec ’05
Dec ’06
Dec ’07
Dec ’08
Dec ’09
Dec ’10
Dec ’11
Dec ’12
Dec ’13
Dec ’14
Dec ’15
Dec ’16
Dec ’17
Dec ’18
Dec ’19
Dec ’20
Dec ’21
Variable Fixed 1–5 years Fixed ≥ 5 years
Russia’s war of aggression against Ukraine that began in February 2022 and the aftermath of the pandemic
are two reasons behind the economic uncertainty that has been created. During the first half of 2022, this
has resulted in sharply increased inflation and rising market interest rates. Mortgage interest rates started
to increase during the spring 2022, and in June 2022 variable mortgage rates averaged 2.5 percent and
mortgage rates with an initial fixed term of more than 5 years amounted to 3.5 percent.
Like Swedish mortgage interest rates, European mortgage interest rates have decreased up until 2021.
Variable mortgage interest rates in Sweden are amongst the lowest in Europe. Denmark and Finland
have the lowest variable interest rates in Europe (see Chart 4.7).
During the period from January to June 2022, 55 percent of new home loans taken out by households
had variable interest rates (see Chart 4.8). During the spring of 2022, the share of households’ new
mortgages with variable interest rate has started to increase. This coincides with the fact that mortgage
interest rates started to rise during the spring. The difference between variable and initial fixed interest
rates was previously comparatively small, but as the interest rates started to increase during the spring
of 2022, the difference between variable and initial fixed mortgage interest rates also increased. As
the initial fixed mortgage interest rates have increased more than the variable mortgage interest rates,
demand for the variable interest rates has increased.
Chart 4.5. Lending to non-financial companies and tenant-owners’ associations,
annual percentage change, monthly values
–4 %
–2 %
0 %
2 %
4 %
6 %
8 %
10 %
12 %
14 %
Dec ’11
Jun ’12
Dec ’12
Jun ’13
Dec ’13
Jun ’14
Dec ’14
Jun ’15
Dec ’15
Jun ’16
Dec ’16
Jun ’17
Dec ’17
Jun ’18
Dec ’18
Jun ’19
Dec ’19
Jun ’20
Dec ’20
Jun ’21
Dec ’21
Jun ’22
Non-financial companies. (excl. tenant-owners’ associations) Tenant-owners’ associations
Source: Statistics Sweden
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Even though the level of interest in variable mortgage interest rates has increased during 2022, the
trend in recent years has moved in the opposite direction. During 2021, the share of households’ new
mortgage loans with variable interest rates amounted to 44 percent, and this share has not been lower
since 2003. For the five years up until 2018, the share of variable interest rates amounted to 70–75
percent of new housing loans. Since then, the share of initial fixed period rates has increased consider-
ably. One reason for the reduced share of variable interest rates in recent years is the fact that initial
fixed interest rates have dropped to the same low levels as variable interest rates. The uncertainty in
the markets during the pandemic from 2020 may also have contributed to households preferring to tie
rates to a greater extent.
Even though the demand for housing loans with variable interest has varied in Sweden in recent years,
the share of variable interest rates here is higher than in many other comparable European countries.
Chart 4.9 illustrates the share of variable interest loans among new housing loans in the first quarter
of 2022 in a number of European countries. In Finland, 96 percent of new housing loans have vari-
able interest rates whereas in Sweden 48 percent of new housing loans have variable interest rates. In
Belgium, for example, housing loans with variable interest rates are rare.
Chart 4.8. New loans to households, housing finance institutions,
percentage breakdown by interest term
Source: Statistics Sweden
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
■ Variable ■ Fixed 1–5 years ■ Fixed ≥ 5 years
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Jan–Jun 2022
Chart 4.7. Variable mortgage interest rates (variable and initial fixed period
rate up to 1 year), first quarter of 2022, percent
Source European Mortgage Federation.
IE BE DE NL UK ES IT SE PT FI DK
0.0 %
0.5 %
1.0 %
1.5 %
2.0 %
2.5 %
3.0 %
3.5 %
4.0 %
REPORT
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5. Household indebtedness
In Sweden, 64 percent of households own their homes, see Chart 5.1. Of these households, 81 percent
have a home loan. The relatively high percentage of households (who own their own home) with a mortgage
is a sign of a mature mortgage market, as well as of a tradition of taking out loans to finance homes.
The percentage of homeowners (households) with home loans is also relatively high in the other Nordic
countries, except for Finland, which has a slightly lower percentage. A comparably high percentage of house-
holds (who own their own home) with home loans is also found in countries such as the Netherlands and
Switzerland. In Switzerland, however, only slightly over 40 percent of households own their own homes.
In many markets in Eastern Europe, as well as in Italy and Greece, the percentage of households with
home loans is relatively low. This may be due in part to the fact that the mortgage market is relatively
new, and in part to a tradition of financing housing in other ways, for example in Italy and Greece.
Although the percentage of households with home loans is low in these countries, the percentage of
households that own their homes is high and customarily exceeds 70 percent.
Chart 4.9. New housing loans with variable interest rates (fixed up to one year)
during the first quarter of 2022
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
FI PT SE ES DK IE IT NL DE UK BE
Source: European Mortgage Federation
Chart 5.1. Share of households who own their home,
with or without a housing loan, percent
0 %
10 %
20 %
30 %
40 %
50 %
60 %
70 %
80 %
90 %
100 %
NO NL SE DK BE FI PT CH IE DE FR ES EE AT IT LT PL LV GR
■ With housing loan ■ Without housing loan
Source: Eurostat
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REPORT
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Swedish household indebtedness has risen continuously since the mid-1990s, both in absolute figures and rela-
tive to disposable income. The debt ratio (loans in relation to disposable income) for Swedish households is,
on average, 200 percent. This level is relatively high when compared internationally.
At the same time, it is important to note that the debt ratio of young households and urban households is
significantly higher than the average. New borrowers have an average debt ratio amounting to 327 percent
in 2021 calculated on their gross income, according to Finansinspektionen in its yearly report on the Swedish
mortgage market. The debt ratio is higher in the metropolitan areas, and in Stockholm the average debt ratio
amounted to 397 percent in 2021.
The debt ratio for new loans declined somewhat during 2018 due to the new, stricter amortisation require-
ments, but has increased again. In the metropolitan areas a higher percentage of new borrowers are affected
by the stricter amortisation requirements. Following the introduction of the stricter amortisation requirement
in 2018, the average debt ratio declined in all parts of Sweden and above all in the metropolitan areas where
the house prices are the highest.
With the exception of a marked decrease in the debt ratio over the course of a couple of years following the
financial crisis in the beginning of the 1990s, the household debt ratio has been increasing since at least the
1950s (see Chart 5.2). Household interest payments in relation to their income, the interest ratio, is no higher
in 2021 than at the beginning of the 1960s. However, in the early 1960s, the debt ratio was only around 70
percent. The fact that the interest payments in relation to income are currently low, at the same time as the
debt ratio is at a record high level, can be explained by the historically low lending rates.
A number of measures have been taken in recent years with the aim of counteracting high indebtedness. In
2010, Finansinspektionen introduced a mortgage cap, whereby home loans may not exceed 85 percent of the
value of the home. Finansinspektionen has also introduced a risk weight floor for Swedish mortgages in order
to tie up more capital in relation to banks’ mortgage lending. The risk weight floor for mortgages is currently
25 percent.
Another measure to tackle high indebtedness is the introduction of amortisation requirements. In June 2016,
Finansinspektionen’s regulation on amortisation requirements entered into force. The regulation provides that
new mortgage loans from June 2016 with a loan-to-value (LTV) above 50 percent must be amortised. Mort-
gages with an LTV above 70 percent must be amortised by at least two percent of the original loan amount
each year. Mortgage loans with an LTV ratio between 50 and 70 percent must be amortised by a minimum of
one percent annually.
From March 2018, stricter amortisation requirements entered into force. The stricter amortisation require-
ments stipulate that new borrowers with a housing loan and whose housing debts exceed 4.5 times their gross
income must amortise at least one percent in addition to the fundamental amortisation requirements.
Chart 5.2. Household debt ratio and interest ratio (debt and interest payments,
gross, as a percentage of disposable income, net) 1950–2021
Source: Statistics Sweden
0 %
2 %
4 %
6 %
8 %
10 %
12 %
14 %
16 %
18 %
20 %
22 %
0 %
20 %
40 %
60 %
80 %
100 %
120 %
140 %
160 %
180 %
200 %
220 %
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
Debt ratio Interest ratio (right axis)
REPORT
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Chart 6.1. Covered bonds – outstanding and issued during each year,
SEK billion
Source: Swedish Bankers’ Association
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
0
250
500
750
1,000
1,250
1,500
1,750
2,000
2,250
2,500
■ Outstanding stock ■ Issued during the year
The outbreak of the pandemic in early 2020 has had a negative impact on large parts of the Swedish
economy. In April 2020, in order to mitigate the effects for households affected by Covid-19 and the
sharp decline in the Swedish economy, Finansinspektionen introduced an option for a general exemp-
tion from the amortisation requirements. The exemption from the amortisation rules came to an end
on 31 August 2021.
6. Funding
Currently, all of the important participants on the Swedish mortgage market have covered bonds as
a funding instrument. Following new legislation which came into force in 2004, former housing bonds
were all converted into covered bonds in the subsequent years and all new issues since then have been
covered bonds. Chart 6.1 illustrates the growth in the outstanding stock of covered bonds and the
amounts that have been issued. The increase in the outstanding stock between the years 2006–2008 is
to a large extent due to housing bonds being converted into covered bonds.
Issues of covered bonds to finance mortgage lending take place in both banks and mortgage institutions.
In tandem with the covered bonds, housing finance institutions’ lending is also funded by borrowing in the
form of loans from the parent bank. Loans from the parent bank amounted to an average of 47 percent of
the housing institutions’ total balance. On average, only a very small percentage is attributable to other
financing in mortgage institutions, such as certificates.
Since their introduction in 2004, Swedish covered bonds have proven to be a well-functioning form of financ-
ing. One of several explanations is the high credit quality of the stock of mortgages that make up the majority of
the collateral for the bonds. Unlike in many other countries, the Swedish market worked well even during the
recent financial crisis. The market for Swedish covered bonds has also functioned well following the outbreak of
the pandemic at the start of 2020. Almost 30 percent of the Swedish banks’ covered bonds are owned by foreign
investors. In addition, around 20 percent of Swedish covered bonds are held by Swedish insurance companies and
pension institutions, which thereby fulfil an important function on the mortgage market.
Since 2020, the Riksbank has purchased covered bonds as a part of the Swedish monetary policy. The Riksbank’s
holdings of covered bonds have increased continuously up until the first quarter of 2022, when the Riksbank’s
holdings amounted to SEK 418 billion, or the equivalent of 16 percent of the outstanding stock of covered bonds.
After this time, the Riksbank’s holdings of covered bonds have decreased slightly and, at the end of June 2022,
the stock of covered bonds held by the Riksbank amounted to SEK 399 billion, which corresponds to
approximately 15 percent of the total stock of covered bonds in Sweden.
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7. Other events in 2021–2022
The outbreak of the pandemic in early 2020 has had a negative impact on large parts of the Swedish
economy. The Swedish government and authorities implemented a number of measures to mitigate the
impact on the economy. In April 2020, specifically in relation to the housing market, Finansinspektionen
introduced an option for a general exemption from the amortisation requirements that the authority
had introduced in 2016 and 2018. The purpose of the amortisation exemption was to mitigate the
impact on households affected by the pandemic and the subsequent sharp decline in the Swedish
economy. The exemption from the amortisation rules came to an end on 31 August 2021.
In the spring of 2022, a government study proposed that the banks should be given the possibility to
provide a government-backed starter loan to first-time home buyers. The starter loan could amount to
ten percent of the home’s value or SEK 250,000, whichever is lower. A prerequisite for the loan is that
the first-time buyer takes out a regular mortgage with a loan-to-value ratio of 85 percent. The govern-
ment guarantee means that the bank receives compensation for any loss on the starter loan, while the
borrower receives favourable repayment terms for the part of any loss that is covered by the govern-
ment guarantee.
During the summer of 2022, another government study has put forward a proposal for a state register
of tenant-owned apartments. The register must contain basic information as well as information about
mortgages for all tenant-owned apartments in the country.
Chart 6.2. Covered bonds – outstanding stock per institution
on 31 December 2021
Source: Swedish Bankers’ Association
25 %
18 %
15 %
12 %
11 %
9 %
4 %
3 %
2 %
■ Stadshypotek
■ Swedbank
■ Nordea Hypotek
■ SEB
■ SBAB (Swedish Covered Bond Corporation)
■ Länsförsäkringar Hypotek
■ Danske Hypotek
■ Landshypotek
■ Skandiabanken
■ Sparbanken Skåne
■ Bluestep Bank
0.8 %
0.2 %
During 2006, three institutions converted their mortgage bonds into covered bonds. These institutions
were Nordea, SBAB and Stadshypotek. During 2007, they were joined by a further three institutions,
namely Landshypotek, Länsförsäkringar Hypotek and SEB. In 2008, Swedbank Hypotek began to convert
housing bonds into covered bonds and Skandiabanken followed by issuing covered bonds in 2013. During
2018, Danske Hypotek and Sparbanken Skåne started issuing covered bonds, and Bluestep Bank started
issuing them in 2020. In 2021, Borgo AB (Ltd) was also granted permission to issue covered bonds and
started issuing them during 2022. Chart 6.2 shows how the outstanding stock is distributed among these
institutions at the end of 2021.
In recent times, a number of new institutions, i.e. mortgage credit companies, have established
themselves on the Swedish market. Stabelo and Hypoteket are two examples mentioned in Chapter 3.
The new companies are funded through their mortgages, by which they create and manage investment
products on behalf of institutional investors within the framework of an alternative investment fund.
REPORT
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