FI Analysis 10: Amortisation requirement reduced household debt

This FI Analysis shows that the amortisation requirement has helped households with new mortgages change their behavior. New mortgagors are taking smaller mortgages than what they would have done if FI had not implemented the amortisation requirement. These households are also buying less expensive homes.

The amortisation requirement has the greatest impact on the most indebted households. In contrast to what was expected before FI implemented the amortisation requirement, the analysis shows that the amortisation requirement has affected older households rather than younger households. Younger households have not significantly changed their behavior as a result of the requirement. However, families with children and home buyers in Stockholm and Gothenburg were clearly affected by the amortisation requirement. Households subject to the amortisation requirement are now buying less expensive homes and significantly less expensive holiday homes, but so far they are buying tenant-owned apartments at the same price level as before the implementation of the requirement.

An analysis of all new mortgagors in the mortgage survey indicates that households with new mortgages on average bought homes that are just over 3 per cent less expensive as a result of the amortisation requirement. Household loan-to-income ratios diminished on average by almost 9 per cent as a result of the requirement.

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