Swedes' mortgage debt continues to swell

The Local Sweden
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Swedes' mortgage debt continues to swell
An apartment block in Malmö. File photo: Simon Paulin/TT

Swedes are borrowing money more than ever, data from Statistics Sweden revealed on Wednesday, as household indebtedness reached new heights.


The annual growth rate of household indebtedness was calculated to be 4.9 percent in October this year, a 0.1 percentage-point increase in one month. Statisticians at the state agency predicted that the increase will continue, and cited the upswing from 4.5 percent in January 2013.

In total, Swedes have borrowed nearly 2.9 trillion kronor ($440 billion). The net increase from October last year is 134 billion kronor. 
Statistics Sweden said that mortgages stood for the lion's share of the increase - around 115 billion - which by October this year had reached an annual growth rate of 5.2 percent.

The Swedes are also increasingly borrowing money for non-household related expenditures, known in Sweden as consumption loans. The borrowing rate in that sector has now hit an annual growth rate of 3.9 percent.

The Swedes still enjoy low interest rates - as the Riksbank has pegged the national repo rate at one percent for the time being. Its executive board said in October that it did not forecast raising the repo rate until late 2014 at the very earliest, citing the need to support the economic recovery.
Two board members expressed a wish to lower the repo rate further to 0.75 percent.

Swedes with adjustable-rate mortgages saw the rates increase slightly from 2.94 in September to 2.95 in October. Home-buyers who bought a place to live in October had on average a 2.84-percent interest rate, a decrease from September's 2.87.


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