Sweden cuts maximum mortgage term to 105 years (the average is 140)
Nybroviken harbour in Stockholm Sweden
House prices across Sweden were up 18pc last year
By Richard Dyson
24 March 2016 • 7:19pm
Think there's a housing affordability crisis in Britain, with low mortgage rates likely to drive house prices even higher?
Take a look at Sweden where lending policies have been more generous, and where house price inflation has been (at least recently) more extreme.
A number of banks and analysts have warned that Sweden's housing market is overheating, with HSBC in January saying: "The pace of acceleration in the housing market points to a bubble."
House prices in England surge in buy-to-let rush as Wales and Scotland stagnate
Why it takes 13 years for a single person to save for their first home
Compare mortgages across the market
House prices across the country were up 18pc last year.
This compares to Britain's house price rises in 2015 of between 5pc and 10pc, depending on which index is used.
Now Sweden is dealing with its overheated housing market by reining in mortgage availability.
Regulators introduced restrictions which will mean mortgage terms - the time homebuyers have to clear the debt - will be drastically reduced to just... 105 years.
The move comes because historically there has been no time limit on mortgage duration.
So as prices rose and affordability became tougher, Swedish banks' response was to extend terms, as had been the case in other high-cost property markets including Japan in the Eighties.
The average term is reported to be 140 years. This meant many people who inherited property but who could not afford to take on the mortgage debt had to sell up.
Swedish banks were quoted in the local press as opposing the move.
"It isn't good for the finances of households as it will make mortgages more expensive and the terms not as good. And it isn't good for financial stability," the head of Swedish Bankers' Association was reported to say.
In Britain, there has been a move by some lenders to increase mortgage terms but only for younger borrowers.
Even then, the maximum term tends to be 35 years, although some lenders - including Halifax and Nationwide - go up to 40, brokers say.
The Mortgage Market Review introduced by British regulators in 2013 made it difficult for lenders to arrange loans which went into borrowers' likely retirement
Generational loans.
Even HDB 99 years lease also not sufficient to cover........
Maybe HDB should extend the lease to 200 years.
Talk about being a perpetual debt slave........
Nybroviken harbour in Stockholm Sweden
House prices across Sweden were up 18pc last year
By Richard Dyson
24 March 2016 • 7:19pm
Think there's a housing affordability crisis in Britain, with low mortgage rates likely to drive house prices even higher?
Take a look at Sweden where lending policies have been more generous, and where house price inflation has been (at least recently) more extreme.
A number of banks and analysts have warned that Sweden's housing market is overheating, with HSBC in January saying: "The pace of acceleration in the housing market points to a bubble."
House prices in England surge in buy-to-let rush as Wales and Scotland stagnate
Why it takes 13 years for a single person to save for their first home
Compare mortgages across the market
House prices across the country were up 18pc last year.
This compares to Britain's house price rises in 2015 of between 5pc and 10pc, depending on which index is used.
Now Sweden is dealing with its overheated housing market by reining in mortgage availability.
Regulators introduced restrictions which will mean mortgage terms - the time homebuyers have to clear the debt - will be drastically reduced to just... 105 years.
The move comes because historically there has been no time limit on mortgage duration.
So as prices rose and affordability became tougher, Swedish banks' response was to extend terms, as had been the case in other high-cost property markets including Japan in the Eighties.
The average term is reported to be 140 years. This meant many people who inherited property but who could not afford to take on the mortgage debt had to sell up.
Swedish banks were quoted in the local press as opposing the move.
"It isn't good for the finances of households as it will make mortgages more expensive and the terms not as good. And it isn't good for financial stability," the head of Swedish Bankers' Association was reported to say.
In Britain, there has been a move by some lenders to increase mortgage terms but only for younger borrowers.
Even then, the maximum term tends to be 35 years, although some lenders - including Halifax and Nationwide - go up to 40, brokers say.
The Mortgage Market Review introduced by British regulators in 2013 made it difficult for lenders to arrange loans which went into borrowers' likely retirement
Generational loans.
Even HDB 99 years lease also not sufficient to cover........
Maybe HDB should extend the lease to 200 years.
Talk about being a perpetual debt slave........
... in the place of the demolished blocks will be new replacement blocks, more crammed together with reduced liveable area....narrow but more expensive car parks, more conservancy charges, etc, etc...the previous generation is kaput....they want the next generation to take up $500,000,..... $1,000,000 flats and service the loans over, say the next 30 to 40 years.....again money masok in pocket in 30 40 years.....again the cycle will repeat itself, on and on and on again.....
