Mortgage Crash Course – Step 1: Mortgage Basics

Understand the basics of how Swedish mortgages are structured

What Is a Mortgage?

A loan secured by your home: A mortgage ("bolån") is a loan where the property itself serves as collateral. In Sweden, these are recourse loans — you are personally liable for the full amount, even if the property loses value.
You need at least 10% down: Swedish law caps mortgages at 90% of the property's market value (raised from 85% in April 2026). The remaining 10% is your down payment ("kontantinsats"), which you must fund with savings or other means. For supplementary loans ("tilläggslån"), the cap is 80%.
You must pay down the loan over time: Sweden has mandatory amortization rules. If your loan exceeds 70% of the property value you amortize at least 2% per year, and 1% between 50–70%. The extra 1% for high debt-to-income ratios was removed in April 2026.
Your rate can be fixed or variable: You choose a binding period ("bindningstid") from 3 months (variable) up to 10 years (fixed). Most Swedes pick variable or short fixed periods. You can split your loan across different periods to spread risk.
The bank secures a claim on your property: For houses, a mortgage deed ("pantbrev") is registered at Lantmäteriet — existing deeds from previous owners can be reused, saving you the 2% stamp duty. For apartments (bostadsrätt), no deed is needed; instead the bank registers a lien on your cooperative share.
What happens if you stop paying: If you miss payments, the bank will first contact you and try to find a solution — such as interest-only periods or adjusted amortization. If the situation is not resolved, the bank can ultimately demand full repayment and, as a last resort, force a sale of your property through Kronofogden (the Swedish Enforcement Authority).

How Banks Assess You

Income: Stable employment income is king. Banks verify via pay slips ("Lönespecifikation") and tax returns.
Existing Debt: Car loans, student loans ("CSN"), and personal loans all reduce your borrowing capacity.
KALP ("Kvar Att Leva På"): The bank calculates what's left after housing costs at a stress-tested rate ("Kalkylränta"), typically 6–8%. Must cover standardized living expenses.
Property Valuation: The bank can value the property independently. If valued lower than the purchase price, you may need more cash.

Amortization Requirements ("Amorteringskrav")

50–70% Loan-to-Value Ratio: You must amortize at least 1% of the loan per year.
Above 70% Loan-to-Value Ratio: You must amortize at least 2% of the loan per year.
High Debt-to-Income (removed April 2026): Previously, if debt exceeded 4.5x gross income, an additional 1% per year was required on top of the 1% or 2%. This stricter requirement ("Skärpt amorteringskrav") was abolished on April 1, 2026.
Exemptions: New builds ("Nyproduktion") can get up to a 5-year amortization holiday ("Amorteringsfrihet") at the bank's discretion. Banks may also pause amortization for hardship or parental leave ("Föräldraledighet").

Rule Changes Enacted April 1, 2026

Higher Mortgage Cap ("Bolånetak"): The mortgage cap was raised from 85% to 90% for new home purchases, lowering the minimum down payment ("Kontantinsats") from 15% to 10%.
Stricter Cap for Supplementary Loans ("Tilläggslån"): For supplementary loans (additional borrowing against existing property), the cap was lowered to 80%.
Abolition of the 4.5x Income Rule: The stricter amortization requirement ("Skärpt amorteringskrav") for high debt-to-income ratios was removed entirely.
New Legal Framework: The rules moved from Finansinspektionen guidelines (FFFS 2016:16) into a new statute ("Lag om begränsning av bostadskrediter", Law 2026:226), shifting oversight from FI to the legislature.

Mortgage Protection Insurance ("Bolåneskydd" / "Låneskydd")

Payment Protection ("Betalskydd"): Covers monthly payments for 12–24 months if you become involuntarily unemployed or sick. Sometimes marketed as "Bo kvar-försäkring" (stay-in-your-home insurance).
Life Insurance ("Livförsäkring"): Pays off part or all of the mortgage if a borrower dies. Especially relevant when both incomes are needed.
Cost: Varies by provider and coverage level. Typically priced as a percentage of the insured monthly benefit amount (e.g. 3–5% of the monthly payout), which works out to roughly 0.2–0.5% of the loan amount per year depending on coverage. Weigh against your existing coverage and financial buffer.
Not Mandatory: No bank requires it, but some recommend it. Evaluate whether you actually need it.

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