Council on Legislation gives thumbs up to stricter mortgage requirements
The Council on Legislation has approved the government's proposal to tighten up the requirements for people to pay back their mortgages, according to news agency TT, saying that it is constitutional.
However, the council did suggest making the bill clearer, so that it would state that the new requirements would only apply to mortgages taken out after May 1, 2016, when the law would go into effect.
The new requirements were scheduled to go into effect this past summer, but were prevented from doing so for juridical reasons.
The chief economist at the Finansinspektionen (FI) authority, Henrik Braconier, told TT last week, "The mortgage requriment is needed to dampen the risks tied to household debt and can contribute to calmer development of the housing market."
Swedish household debt has been rising fast, and if a housing bubble were to burst, it could have serious consequences for the Swedish economy, reports news agency TT.
Per Bolund, the minister for financial markets, tells Swedish Radio News he expects the mortgage requirement bill to pass in parliament. Also, in order to encourage more housing to be built, newly constructed homes would be exempt from the new requirements.