Regulatory AlertsFinansinspektionen’s regulations regarding amortisation of loans collateralised by residential property
Finansinspektionen issued regulations requiring new mortgages with loan-to-value ratios exceeding 50 percent to be amortised, applying to all banks and credit market companies. Subsequent amendments expanded the scope to include firms authorized under the Mortgage Business Act and introduced income-based amortisation requirements for borrowers with mortgages exceeding 4.5 times their gross income. The rules also facilitate electronic transfer of amortisation documentation to support customer mobility between mortgage providers.
Finansinspektionen’s regulations regarding amortisation of loans collateralised by residential property
Repealed 2026-03-31 see FFFS
2026:1
Summary
The regulations specify that new mortgages shall be amortised if the loan-to-value ratio exceeds 50 per cent. The amortisation requirement applies to all new loans that are collateralised by a residential property. The property may be revalued every fifth year. Borrowers who increase existing mortgages after 1 June to a loan-to-value ratio that exceeds 50 per cent may be offered the option of instead amortising the additional loan over a period of ten years. The rules apply to all banks and credit market companies.
The regulations are decided pursuant to new legislation and a new authorisation for Finansinspektionen. The regulations were approved by the Government through powers granted on 12 May 2016.
The new regulations enter into force on 1 June 2016.
Amendments
The regulations are amended to make it easier for customers who want to switch mortgage companies to receive their amortisation documentation. The amendment entails that a mortgage firm must be able to receive a request for amortisation documentation electronically and in other suitable manners and provide the document to the customer in the same manner. The documentation must be provided promptly.
The scope of the regulation is expanded to also include firms with authorisation to issue mortgages in accordance with the Mortgage Business Act (2016:1024). The possibility has also been introduced for a firm to allow a borrower not to amortise in accordance with the regulations when the firm issues the loans referred to in section 4, fourth paragraph, second sentence of the Consumer Credit Act (2010:1846).
The Government granted FI permission on 15 November 2018 to decide on the regulations. The amendments go into effect on 1 January 2019. amendment 2018:24
Under the amendment, new borrowers with a mortgage in excess of 4.5 times their gross income shall amortise at least 1 per cent of the debt in addition to the amortisation already in effect.
The Government granted its consent on 30 November 2017 for Finansinspektionen to decide on the regulations. The amendments go into effect on 1 March 2018. Amendment 2017:23
Documents
FFFS 2016:16
FFFS 2016:16 (consolidated version)
Decision memorandum FFFS 2016:16
Changes
Number
FFFS 2024:1
Date
2024-09-01
Heading
FFFS 2024:1
Number
FFFS 2018:24
Date
2019-01-01
Heading
FFFS 2018:24
Number
FFFS 2017:23
Date
2018-03-01
Heading
FFFS 2017:23
PM
Decision memorandum FFFS 2017:23