Sweden Mortgage

In this paper we will discuss about the mortgage market in Sweden. Mainly the mortgage credit institutions are dominating the Swedish mortgage market. One state owned credit institution is now emerging as a big player in the market. Many banks also provide mortgage loans.
In Sweden, the credit market companies, that are addressed as mortgage credit institutions, are used to provide the mortgage loans. In 2003, the total amount of outstanding loans provided by these institutions was 1300 billion SEK. These credit institutions are growing rapidly in Sweden.

Lending by these institutions now exceeds the amount of bank lending. The mortgage credit institutions mainly provides loans for housing properties, but sometimes it also provide credit for office buildings and commercial complexes.

In Sweden, to get the mortgage loans the customer has to keep property as loan security. The lending comprises a first mortgage in which 70% to 80% of the property value has been pledged.
Additional credit is also available in the Swedish mortgage market. The banks which take over the mortgage institutions may provide this in the form of a second mortgage as well. During 2007, almost 50% of the new lending from the credit institutions had been provided with variable interest rates.

The two big credit institutions, namely, Spintab and Stadshypotek, have been owned by F�reningsSparbanken and Handelsbanken respectively. The other two institutions, SEB and Nordea are also growing. They have started to provide mortgage credit subsidiaries.

A state owned mortgage credit institution, known as SBAB, exists in Sweden which mainly provides financed mortgages. It is now one of the big credit institution in Sweden mortgage market.

Many banks, for example, Kaupthing Bank, SkandiaBanken Bank etc, in Sweden are known as a mortgage loan provider. They are also big players in the mortgage market and becoming a competitor to the credit institutions. The bank-owned mortgage credit institutions work together with their respective patent banks. Now a days, almost all the credit institutions provide mortgage application service through the internet.

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Last Updated on : 24th August 2013