Swedish mortgage basics

Swedish Mortgages

As a general rule, Swedish mortgage providers will offer a loan of up to 75 percent of the value of the property. Generally, mortgages in Sweden are offered on fixed rates over a period of approximately 20 years.

Mortgage Basics

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As the property market in Sweden gains momentum, the options for Swedish mortgages are also increasing for both local and foreign purchasers.

Everything, including the mortgage industry is exceptionally well organised in Sweden. In addition, foreign investors know what they are dealing with and are able to budget accurately and with confidence.

Typical Mortgage Terms
As a general rule, Swedish mortgage providers will offer a loan of up to 75 percent of the value of the property. Generally, mortgages in Sweden are offered on fixed rates over a period of approximately 20 years.

It is worth bearing in mind that when a mortgage is taken out in Sweden, 2 percent of the value of the mortgage has to be paid to register the deed. This is not always the case, however, and it depends on the type or property, the value of the mortgage and the location of the property. Always check with your real estate agent as to whether you need to budget for this additional cost.

Interest rates in Sweden are generally lower than in the UK, often by more than 2 percent, which can make Swedish rates favourable in comparison to sterling mortgages. That said, the affordability of a Swedish mortgage will depend largely on the exchange rate which, with the strength of the Swedish industry, can sometimes cause considerable difficulty for a UK based individual with a Swedish mortgage.

Another issue of which anyone applying for a Swedish mortgage should be aware is that it is very rare for mortgage providers to take into account potential rental income from the property that you are looking to purchase. In fact, eligibility for a Swedish mortgage is determined solely from UK earned income.

In order to obtain a mortgage, proof of income is vital, particularly as it is unlikely that you will have any financial history in Sweden. With this in mind, as a minimum, 3 months of payslips will be required as well as personal banking statements for a period of around 6 months. It is also helpful to have an employer¡¦s reference or, if you are self-employed, to have the latest audited accounts, as these add weight to any mortgage application.

Summary
Bullet Point The mortgage market in Sweden is highly regulated and standardised;
Bullet Point it is very rare to find a mortgage provider that will offer more than 75 percent of the value of the property as financing for the purchase;
Bullet Point interest rates are lower in Sweden, which means that they remain a popular choice for foreign investors;
Bullet Point it will be necessary to provide evidence of UK income in order to obtain a Swedish mortgage.

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Typical Interest Payments

First Time Buyers

2.89%

Purchased Fixed

2.89%

Discounted Rate

2.99%

Buy To Let

2.99%

Commercial

3%

 

 

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