April 4, 2018 / 6:17 AM / in 7 months

Swedish FSA says household debts rising, but margins ample

STOCKHOLM, April 4 (Reuters) - Sweden’s financial watchdog said on Wednesday that many households continue to take out large mortgages relative to their incomes though resilience to meet higher interest payments meant risks of substantial bank losses were limited.

“Household debt is continuing to rise. The stricter amortisation requirement that was introduced a month ago is important to slow this development,” FSA Director General Erik Thedeen said in a statement on the watchdog’s annual mortgage report.

The watchdog has introduced a number of regulations in recent years to cool an overheated housing market including higher mortgage risk weights for banks, a loan-to-value cap and recently, tougher mortgage repayment requirements.

After double digit annual price growth in recent years, house prices dipped late in 2017, but most analysts expect the downturn to be mild and relatively shortlived.

Reporting by Simon Johnson and Niklas Pollard

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