According to a survey conducted by Demoskop on behalf of SEB, one in five households affected by the amortization requirement has either already applied for a moratorium or plans to do so.
Approximately one million households in Sweden are subject to the current amortization requirements due to their high mortgage loans. The repayment requirements for loans are set by the borrower together with the lender, but the financial supervisory authority has also set mandatory rules for amortization. For example, there is no mandatory amortization requirement if the mortgage loan is less than 50 percent of the value of the property. The survey shows that five percent of affected households have already applied for principal reduction, while 16 percent plan to do so.
– The fact that more and more households are planning to apply for amortization relief shows that times are still tough and that many are struggling financially, says Americo Fernandez, a private economist at SEB, to the tax funded government broadcaster SR.
Illness or unemployment
It is possible to get repayment relief if personal finances have deteriorated. However, many respondents say that it is the higher interest rates that make them want to take a break, but as borrowers they are expected to be able to cope with higher interest rates and therefore it is not a valid reason to apply. Valid reasons include unemployment or illness. However, banks have occasionally begun to approve forbearance for parental leave.
– It is a way for families with children during a difficult time to get some relief in their personal finances. In the long run, this could put some obstacles in the way of the repayment culture we have been trying to build in Sweden over the past decade, says Fernandez.