Halt in rising trend for Swedish mortgages

The sum of all new mortgages in Sweden has dropped for the first time since 2000, with the total value of new originations down 6 percent from 2007.

So far this year, Swedes have signed on to housing loans totaling 205 billion kronor ($32 billion), a reduction of 11 billion kronor compared with the same period last year, writes the Göteborgs-Posten newspaper.

The statistics come from information reported by creditors to banking associations, and the reduction is most pronounced for loans taken to purchase new freestanding houses.

New mortgages secured by single family houses have dropped by 9 percent so far this year, while loans for the purchase of apartments have actually risen slightly.

At the same time, the average size of a mortgage in Sweden is increasing, according to a study commissioned by the Länsförsäkringar banking and insurance group.

Home loans now total 776,800 kronor on average, an increase of 35 percent compared with 2005.

Altogether, mortgages held by Swedes reached 1.5 trillion kronor as of July 31st, 2008, with nearly 80 percent of the loans secured by houses.

Properties in Sweden