STOCKHOLM, Sept 8 (Reuters) - Sweden’s central bank said on Friday the financial watchdog should go ahead as soon as possible with plans for tougher mortgage repayment rules amid worries about a red-hot housing market.
“Swedish households’ high and rising indebtedness forms a serious threat to financial and macroeconomic stability. It is therefore necessary to introduce as quickly as possible measures to increase households’ resilience,” the central bank said in a statement.
Earlier this year, the Financial Supervisory Authority proposed that borrowers who take out new mortgages of more than 4.5 times their income before tax should be forced to amortise an additional 1 percentage point annually above current requirements.
Under current rules, homebuyers are required to pay down 2 percent of the principal per year on new mortgages until the loan is 70 percent of the property value, and then pay off 1 percent a year until the loan/value ratio is 50 percent. (Reporting by Simon Johnson; editing by Niklas Pollard)