How big a Swedish mortgage? On SEK 70,000 a month, SEK 3.4 million

A couple earning SEK 70,000 a month before tax may be able to borrow SEK 3.4 million for a SEK 4 million house in Sweden. Salary alone does not decide it, though.

The bank checks what you have left to live on at an interest rate far above today's. And the mortgage may be at most 85% of the home's value. The worked example below shows each step.

Two limits apply

The first limit is the loan-to-value cap ("bolånetak"). The mortgage may be at most 85% of the home's value. The rest is your down payment ("kontantinsats").

The second limit is the bank's credit assessment. Under the Consumer Credit Act, a bank may only lend if you can afford to repay. In practice, banks do this with a "money left to live on" calculation ("kvar att leva på-kalkyl", often shortened to KALP). Every large bank uses one, according to the Financial Supervisory Authority ("Finansinspektionen").

How the calculation works

The bank starts from the household's income after tax. From that it takes:

• Interest on all loans, at a stress rate ("kalkylränta") higher than your actual rate. Tax relief on the interest is included.
• Amortization under the amortization rules.
• Running costs of the home, or the fee to the housing association.
• A standard amount for living costs such as food, clothes and transport. It depends on how many people live in the household.

What is left must be zero or more. If not, the answer is no, or a smaller loan.

The stress rate

The stress rate is the bank's test that you can cope with higher rates over time. Each bank sets its own. According to the Riksbank, several banks used a stress rate of just over 6% in 2024. The Riksbank's worked example uses 7%, and so do we.

The example: a couple on SEK 70,000 a month

The couple earn SEK 70,000 a month together, or SEK 840,000 a year. Like the Riksbank in its examples, we assume tax of 30%. That leaves SEK 49,000 a month after tax.

They want to buy a house for SEK 4,000,000. With a down payment of SEK 600,000 the loan is SEK 3,400,000, which is 85%.

• Interest at the 7% stress rate: SEK 238,000 a year. The interest deduction ("ränteavdrag") applies per person, at 30% up to SEK 100,000 and 21% above that. After the deduction the cost is SEK 170,020, or SEK 14,168 a month.
• Amortization: the loan is above 70% of the value, so the rule is 2% a year. That is SEK 5,667 a month. The loan is below 4.5 times annual income, which is SEK 3,780,000, so the stricter amortization rule ("skärpt amorteringskrav") does not apply.
• Running costs: SEK 4,500 a month.

That leaves 49,000 - 14,168 - 5,667 - 4,500 = SEK 24,665. It must cover the bank's standard living costs and any other loans. For comparison, the Riksbank's simplified example uses SEK 10,000 a month for a single person.

When the loan grows

Say the couple want to buy for SEK 5,000,000 instead and borrow SEK 4,250,000. Two things happen.

• Interest at the stress rate rises to SEK 18,085 a month after tax relief.
• The loan is now above 4.5 times annual income. The stricter rule adds 1%, so amortization is 3%, or SEK 10,625 a month.

That leaves 49,000 - 18,085 - 10,625 - 4,500 = SEK 15,790. With children or a car, that may not be enough. The stricter rule eats a large part of the room.

The real cost is lower

At a variable rate of 2.65%, the SEK 3,400,000 loan actually costs SEK 5,256 a month after tax relief. The gap of almost SEK 9,000 against the stress test is the buffer the bank wants you to have if rates rise.

Other things that count

• Other loans. Car loans, student loans and credit cards count in the calculation and cut your room.
• Children. Each child raises the standard amount for living costs.
• Debt-to-income cap. Banks may set their own cap on total debt relative to income. It applies even if the calculation adds up.
• The association's finances. If you buy a co-op flat, the bank may assume a higher fee if the association has a lot of debt.

How to get an answer

Apply for a mortgage pre-approval ("lånelöfte"). The bank runs the calculation with your own figures and gives a preliminary answer on how much you can borrow.

If you have small debts, it can pay to clear them first. The financials chapter of the real estate crash course helps you set a budget before you apply.

Sources

• Riksbank: Credit assessment for mortgages, staff memo June 2024 (Swedish)
• Finansinspektionen: The Swedish mortgage market, April 2025 (Swedish)
• Finansinspektionen: FFFS 2016:16 on amortization (Swedish)
• Skatteverket: Deduction for interest costs (Swedish)
• Bolån Radar: banks' average rates

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This content is general information, not financial or legal advice. Bolån Radar collects data from banks and authorities and cannot guarantee that it is complete or free of errors. Talk to your bank or an adviser before you decide.