High indebtedness means that more people do not consider themselves able to afford repayments

More Swedes are now asking to pause their repayments.

The banks do not want to answer how big the increase is, but several state that they see a clear increase.  

- Our customers are deeply concerned about the uncertain situation that prevails with increased mortgage interest rates, rising electricity prices and high inflation.

That they will not be able to cover their costs in the coming months, Anneli Adler, Head of Private Market at Danske Bank Sweden, states in an email to SVT Nyheter.

Before the election, the governing parties stated that they wanted to pause the amortization requirement.

But the Financial Supervisory Authority (FI) and the Riksbank have given the thumbs down - and no new announcement has yet come from the political side. 

There is no debt ceiling

The government has the final say.

But at the same time must take into account the legal requirement for a healthy amortization culture and counteract high indebtedness, according to FI.

The debt ratio, i.e. how much debt households have in relation to their income, is at record high levels.

Unlike, for example, Denmark, Sweden does not have a debt ratio ceiling.

A similar system would probably have made Swedish households less vulnerable today, believes Per Strömberg:

- But getting such measures through politically when no one else sees a cloud in the sky is difficult.

"A perfect storm"

In 2018, the Financial Supervisory Authority opted out of the debt ratio ceiling in favor of an extra percent amortization for households with a debt ratio of over 450 percent.

Debt ratios initially fell, but the trend turned upwards again.

In Stockholm, almost every third borrower who took out a loan in 2021 ended up exceeding the 450 percent limit.

- Now we find ourselves in the "perfect storm".

For the group of highly leveraged people in the big cities, often young people, it is a tough situation coming up now, says Per Strömberg.  

Are the Swedes over-leveraged?  

- If you cannot repay your loan, you are over-leveraged.

If you have a loan where in this situation you can hardly afford anything else besides the loan, it is probably also a loan you wish you hadn't taken, says Per Strömberg.