4 ms·
As always with debt, how bad it is very much depends on the interest rate of the loans. I bought an apartment here in Sweden a couple of years ago with the mi
by DavidVoid 4y ago
As always with debt, how bad it is very much depends on the interest rate of the loans.
I bought an apartment here in Sweden a couple of years ago with the minimal required down payment (kontantinsats) of 15%, but 20% of my debt is still my student loan that currently has an interest rate of 0.59% (it was 0% a few years ago).
I will say that the housing loans here have one potential issue though: it's very common to have a variable (or only 2 year fixed) interest rate on your loan, so Swedish borrowers will notice increased interest rates much sooner than borrowers in countries where 5+ year fixed rates are common.
Around 80% of new loans for house purchases here have their initial rate fixed for only 1 year or shorter [1].
[1] https://sdw.ecb.europa.eu/quickview.do;jsessionid=3DC3C894DAB6BA2FFAF04380E0AE09BA?SERIES_KEY=304.RAI.M.SE.SVLHPHH.U1.MIR.Z https://sdw.ecb.europa.eu/quickview.do;jsessionid=3DC3C894DA...
- nonethewiser 4y agoWhat are the interest rates now? Presumably they are significantly higher than a few years ago. Although maybe there is a delay.
- DavidVoid 4y agoThey're higher, but still nowhere near what they were in the 80s and 90s (10+%). The Riksbank policy rates is currently 3% [1]. Interest rate on housing loans is roughly 4% at the moment for both floating and fixed rates, it's up from 1.5% in 2020. [1] https://www.riksbank.se/en-gb/statistics/search-interest--exchange-rates/policy-rate-deposit-and-lending-rate/ https://www.riksbank.se/en-gb/statistics/search-interest--ex...
- jopsen 4y agoI live in Denmark, got 15 year mortgage at 0.5% (1% including fees).. But the variable mortgages are a bit sketchy, they could very well be a bomb under housing market -- and could cause prices to collapse.