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Authority showed that, at current pace of amortisation, it takes Swedish households 140 years on average to repay their home loans. Only 40% of borrowers with mortgages smaller than 75% of their property's value actually pay down their debt, according to the report.
(The Business Times, 12 Sep 2013.)
Wah! Like this also can?
If this were to be allowed in Singapore, property prices would shoot through the roof (and to the moon).
Related post:
Leverage up and buy real estate.
Bloggy Award
9 comments:
I remember a certain PM promised a swiss standard of living... With current leverage trends going up, seem like we are head towards that direction
Hi BP,
With the many rounds of cooling measures, I think that our government doesn't want that.
Seriously, 140 years? Mind-boggling!
Indeed is mind-boggling. Seems like they will collapse anytime soon sparking the next Crisis ?
Hi Cory,
Well, it could be a crisis for the Swedish economy but I don't know if it would be big enough to dent more than that.
140 years? That is passing our debt to the next generation. Irresponsible?
Hi INVS 2.0,
I think it should be "generations". In the plural. :(
In Singapore where 40 years housing loans were allowed, I have heard of cases where parents passed the housing loans to their children to continuing servicing. So, it could be more common than we think.
Born with debt, too bad
At risk of over generalising, Sweden has a cradle to grave social system paid for by 50% income tax and around 20% sales tax.
You can take bigger risks if you know the State will take care of you even if you are bankrupt and jobless (whether your grand children can afford it is another matter).
Sweden = Swedish
Switzerland = Swiss
Singapore = no, it's no part of china!
LOL!
Hi SMOL,
50% income tax? No wonder they cannot pay down their housing loans!
I rather have super low income tax and learn to take care of myself (and have a fully paid home). :)
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