• Sweden's news in English
 
app_header_v3

Swedes doomed to die with mortgages: study

AFP · 7 May 2014, 14:35

Published: 07 May 2014 14:35 GMT+02:00

With help from the borrowers, the central bank compared the incomes and loan repayments of almost four million people -- or 52 percent of Sweden's adult population -- between 2010 and 2013.

The study revealed that the debt of 25 percent of them grows every year, while for 15 percent, their debt stays the same year after year.

The remaining 60 percent pay back their mortgages at a very slow pace.

"If the borrowers who have reduced their debts over this period continue to reduce these debts at the same rate, on average they will be free of debt in about 100 years," according to the calculations of central bank economists Jakob Windstrand and Dilan Oelcer.

On average, Swedes with mortgages hold a debt 3.7 times higher than their annual income. In households with the lowest income, the debt is more than four times higher.

Story continues below…

Besides mortgages, which account for 95 percent of their debt, Swedes are not big borrowers.

In a country with a low unemployment rate compared to the rest of Europe and where most of its residents are homeowners, households want to take advantage of record-low interest rates, contributing to a constant rise in the price of property.

The International Monetary Fund has warned Sweden several times about the risks for its financial system, which collapsed in the 1990s after a housing bubble burst.

In January, Economy Nobel Prize laureate Paul Krugman said that Sweden "probably" had a new bubble.

Other economists contradict him, arguing that Swedish households have strong savings and many assets aside from real estate, and that the price increase is due to insufficient construction of new homes.

Your comments about this article

Today's headlines
Swedish court detains 'terror plot' suspect
Attunda district court north of Stockholm. Photo: Maja Suslin/TT

Swedish court detains 'terror plot' suspect
0 minutes ago

A man based in the Stockholm area has been detained on suspicion of preparing to carry out an act of terrorism in January.

First gig for Paris attacks rockers looms in Stockholm
The Eagles of Death Metal performing at a Swedish festival in 2012. Photo: Adam Ihse/TT

First gig for Paris attacks rockers looms in Stockholm
1 hour ago

The Eagles of Death Metal will play their first solo concert since the Paris attacks, at a small gig in the Swedish capital this weekend.

Swedish cop lets suspect go 'because it's Friday'
Fighting crime the Swedish way. Photo: Fredrik Sandberg/TT

Swedish cop lets suspect go 'because it's Friday'
3 hours ago

This is how seriously the Swedes take their work-life balance.

Is this our last glimpse of Swedish royal's baby bump?
Princess Victoria, centre, at the Global Change Awards. Photo: Anders Wiklund/TT

Is this our last glimpse of Swedish royal's baby bump?
6 hours ago

Sweden's pregnant crown princess has made her final public appearance before the birth of the country's next baby royal.

Sweden slashes interest rate to new record low
Sweden has had negative interest rates since last year. Photo: Fredrik Sandberg/TT

Sweden slashes interest rate to new record low
8 hours ago

Sweden's central bank has cut the country's already historically low interest rate even further.

Swedes will not send jets to help French fight Isis
A Jas Gripen used in an Arctic exercise last year. Photo: Foto: Lars Pehrson/SvD/TT

Swedes will not send jets to help French fight Isis
10 hours ago

UPDATED: Leaked documents suggest the Swedish military can't afford to send Jas Gripen jets to support France's fight against Isis.

Swedish terror convicts won't have nationality stripped
A group of pro-Isis protesters in Iraq in 2014. Photo: TT/AP

Swedish terror convicts won't have nationality stripped
11 hours ago

Politicians have rejected a proposal to stop Swedes convicted of terror crimes retaining their nationality.

What's on
Five fab Valentine's ideas whether you're dating or not
Photo: Found Animal Foundation/Flickr

Five fab Valentine's ideas whether you're dating or not
12 hours ago

Here are the the best ways to spend Valentine’s Day in Sweden, as well as our regular weekly listings.

Eight teens suspected of child rape in Sweden
A police car investigating a separate incident in Gothenburg. Photo: Fredrik Sandberg/TT

Eight teens suspected of child rape in Sweden
1 day ago

Eight teenage boys have been arrested in connection with an alleged gang rape of a child in Gothenburg in western Sweden.

Julian Assange
'Sweden is a country with fair reputation for justice'
Julian Assange at Ecuador's London embassy. Photo: AP Photo/Kirsty Wigglesworth

'Sweden is a country with fair reputation for justice'
1 day ago

British PM David Cameron has backed Swedish prosecutors, saying Wikileaks founder Julian Assange should hand himself over and "end this sorry saga".

Sponsored Article
US taxes and FATCA: 'The time for hiding is over'
National
Can you spot the dildo in this photo?
Sponsored Article
Just landed? Here's the secret to finding work in Stockholm
Culture
Seven facts about the shy Swede behind the world's pop music
Travel
Why are people so happy in Malmö?
Blog updates

9 February

Förr, förut, förrän, före and … innan! (The Swedish Teacher) »

"Hejsan! A long time ago, I got this question: It would be a huge help if you could…" READ »

 

5 February

Editor’s blog, February 5th (The Local Sweden) »

"Hello readers, A friend of mine wrote from abroad this week to ask me if international media…" READ »

 
 
 
Sponsored Article
How to set up shop in the 'Silicon Valley of Sweden'
National
Less than one percent of Swedish crimes linked to refugees
Sponsored Article
Luleå: 8 winter must-dos in Sweden's far north
Features
Single? Here are the ten Swedish words you have to learn
Fastighetsbyrån
Gallery
Property of the week: Lindesberg, Örebro
Lifestyle
VIDEO: What's the fuss about Sweden's semla bun?
Sponsored Article
Swiss hospitality: The ladder to your international career
Culture
Ten fab Swedish hits for February
Sponsored Article
Ice magic at north Sweden island lodges
Finest
Gallery
People-watching: February 6th-7th
Travel
Stockholm's eight REAL no-go zones
Sponsored Article
Stockholm's secret ski resort: Kungsberget
Gallery
People-watching: February 3rd
Sponsored Article
Lofsdalen: The real Swedish wilderness
National
'How confronting the man who robbed me gave me closure'
Analysis & Opinion
DEBATE: Why are Swedes so obsessed with Nordic skiing?
Culture
See which Swedish museums are now opening up for free
Gallery
Property of the week: Insjön, Nacka
National
VIDEO: Tensions caught on camera inside Swedish asylum home
Gallery
People-Watching: January 29th - 31st
International
How will Sweden deport up to 80,000 failed asylum seekers?
Sport
When you gotta go... Swedish racing dog does poo and then takes gold
Sport
Guess who just got a HUGE pay rise?
Travel
WATCH: Five top tips for safe ice skating on Sweden's gorgeous lakes
Gallery
People-watching: January 27th
National
'Sweden could be at war within years'
3,454
jobs available
PSD Media
PSD Media is marketing company that offers innovative solutions for online retailers. We provide modern solutions that help increase traffic and raise conversion. Visit our site at:
psdmedia.se