Mortgage Loan – Compare banks and interest rates to borrow for house purchases

With us, you can learn everything you need to know about mortgages to make an informed decision. You can also find and compare the market’s largest and best banks and credit institutions for mortgages here.

Please note that the final interest rate is set individually by the bank

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Buying a house means that for most people you have to borrow a large amount of money in the form of a mortgage. The total interest cost that you pay for a mortgage is often high. It is therefore important when borrowing money to compare lenders and different banks.

When you buy a new home with your own money, you need to put in cash and then you usually have to take out a mortgage for the remaining part of the purchase price. Buying a home is one of the most important financial decisions we have in our lives. Against this background, it is therefore of utmost importance to find the best mortgage loan in order to make the best possible deal.

How much can I borrow?

How much can I borrow?

There are restrictions on how much you can borrow for a home purchase. There are several laws that limit how much you can borrow. The lenders, of course, also have their own rules that determine how much each customer can borrow, and at what interest rate.

DOWN PAYMENT

There is legislation that says that banks must not lend more than 85% of the value of the home. If you need to borrow more money than you can not do so in the context of a mortgage. The alternative is to take a private loan or use their savings money. The remaining 15% of the value of the home is usually called a cash contribution and is thus something you have to finance in a different way than with mortgages.

Let’s say you want to buy a home for SEK 2 million. This means that you can only borrow up to 85% of the value of the property. In our example, there will be 1,700,000. In this case, according to the legislation, you must put a minimum cash bet of SEK 300,000, which is not a small sum. This means that many people choose to take out a private loan in order to finance the cash contribution.

In order to reduce the Swedes’ debt-to-equity ratio, the Financial Supervisory Authority wants to introduce a debt-to-income ceiling that limits the size of loans. No definitive decisions have been made, but several large banks have implemented a version of FI’s recommendation.

Debt ratio is simply a tool to see how indebted a household is. The debt ratio is calculated by dividing a household’s total loan by total annual income and then reversing the ratio by 100 to get it as a percentage. A household with SEK 1,000,000 in loans and an annual income of SEK 300,000 has a debt ratio as follows:

(1,000,000 / 300,000) * 100 = 333%

The household thus has a debt ratio of 333%, ie they have 3 times as much loan as their annual income. The debt-to-debt ceiling means that the banks will not let borrowers take loans that cause the household’s debt-to-income ceiling to exceed the “ceiling”. Right now, the various banks’ debt-to-income ratios are between about 400% to 600%.

Housing is a security

Housing is a security

The housing market is constantly and constantly a hot topic in the news. Prices that go up and down please many but worry others. A big reason why this is so interesting to many is because a large part of the Swedish population has mortgages, and all that is usually quite extensive.

Because of its size, mortgages are something that follows people’s lives for a very long time. Many do not pay off their mortgages until very late in life.

Compared to private loans, and perhaps mainly fast loans, mortgages are very different. Mortgages include large sums of money, have long maturities and run low interest rates. Because of its size, this loan is not something that banks and credit institutions issue easily. There are therefore many requirements and criteria required to take out a loan. Or even get a loan with good terms.

When you take out a mortgage, the bank or credit institution gets a security in the object being acquired, that is, the villa itself or the tenancy right. If you cannot pay interest and repayments, the bank has the right to take over and sell the house at an executive auction in order to get back your borrowed money. That is why you usually say that the bank owns the home until the last repayment has been made.

At the same time, the collateral, or the pledge in another word, means that the lenders dare to lend larger sums and that the interest rates for a mortgage loan are significantly lower than those that apply to, for example, a private loan / loan.

Find the best mortgage loan

Find the best mortgage loan

There are several steps that every potential home buyer should go through before deciding to take out a mortgage.

Top and bottom loans

Normally, a mortgage loan consists of two parts, one a bottom loan and one a top loan. Banks split your mortgage because they have your home as collateral. If it turns out that you cannot pay off your loan, the bank will, as I said, sell the home. But it is not certain that the bank will get back all its money in the sale of the loan. The part of the loan they are sure they can get back is called a mortgage loan . The amount they are unsure of getting back is called top loan and has a higher interest rate. In addition, a top loan is usually given at variable interest rates and often has higher requirements for amortization.

You are not forced to divide your loan into top and bottom loans. If you can pay a larger part of the loan, just over 25% of the purchase price, with your own money no top loan is needed. The bottom loan is between 70% and 80% of the market value depending on the bank. The bottom loan, which in turn can be divided into several smaller loans in order to be able to bind the loans at different interest rates, always runs at a lower interest rate than the top loan.

Calculate the size of the mortgage

Before it should even be considered to take out a mortgage, you must decide how big the loan should be. You must also know if you will be able to afford to pay the down payment and the coming interest rates and repayments.

Remember that you can only borrow up to 85% of the housing price with a mortgage and have to take the rest as a private loan or save the money yourself. A home of one million requires that you save at least SEK 150,000 before the purchase. Then you do not expect extra costs such as moving costs, furniture and renovations.

Borrow to the cash deposit

To finance the cash contribution you can apply for a private loan. The private loan does not require any collateral, so you do not need to justify what you have the money for. You can borrow up to SEK 400,000 with a private loan, which means you can borrow a cash contribution for a house that costs just over SEK 2 million.

Note, however, that not all banks allow you to take out both bank loans and mortgages in order to finance the home purchase. However, there are ways to circumvent this by taking out a mortgage loan from one bank and then taking out the bank loan from another.

However, it is important to try to repay the maximum on the private loan, both because it is more expensive in terms of interest rates and because it is less than the mortgage. It is therefore faster to get rid of a monthly cost if you start to repay the private loan.

Compare different lenders

Many people choose to take their home loan from the same bank they already use as their primary bank. There may be a lot of benefits in doing this, but it never hurts to compare the different players to find a better deal. Here at Oliver Twist you can of course see and compare the lenders and their interest rates. Click on “Apply” or the company logo to go directly to the lender’s website.

Determine your credit rating

Your credit rating is broadly the same as your ability to pay off your debts. Dignity is based on many factors such as finances, living situation, housing and previous payment remarks. Obtaining loans with payment notes when it comes to mortgages is often difficult.

If you have a high credit rating, you will be able to negotiate a lower interest rate as the lenders consider that you will be able to repay your loans. When you apply for a loan, the lenders will make a credit report on you so that the bank can get a picture of your repayment option. Many banks make use of the Information Center, which makes it difficult to borrow money without UC for a home.

It may therefore be a good idea to do this yourself in advance so that you can improve your creditworthiness well in advance.

Apply for a loan pledge

A loan promise is a promise from the bank about how much you can borrow. It is also an indication of what you can afford to buy. You do not need to tell the bank what housing you intend to buy, but it may be good to check how much the housing may cost. The bank may have certain requirements when it comes to loan commitments. For example, they may require proof that you are able to fund the 15% required for the down payment. A loan promise is valid for 6 months, but you can also apply to extend it.

Repayment Requirements

Repayment Requirements

A direct consequence of the discussion surrounding the debt-to-income ceiling is the amortization requirement that was introduced on March 1, 2018. It aims to ensure that the loan-to-value ratio is generally very high in Sweden, as we mentioned above. Broadly speaking, the new amortization requirement means that households that have borrowed more than 4.5 times their annual gross income need to repay 1% of the mortgage each year. 1% doesn’t sound like a bigger sum but the fact is that it affects more than you think.

In addition to this new amortization requirement, the previous amortization requirements still apply. The previous amortization requirements stipulate that housing that is mortgaged with at least 50% must be amortized by a 1% annually. Furthermore, housing with a loan-to-value ratio of at least 70% must be amortized by 2%. When you combine the new repayment requirement with the old rules, which will continue to apply, many households can be forced to repay 3% annually on their mortgage.

Repayment – according to bank lawyers

Rules of Procedure, clarity of norms, contractual freedom, legal certainty, property rights and equality of rights are also violated by CXXI ​​of 2011 on Final Repayment. Good Finance learned the position of the Good Banking Association.

The banks have requested the Constitutional Court to retroactively repeal the law. We also asked the Constitutional Court. We have learned that the petition is not at any stage, even when it is being discussed.

Early repayment law

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The Good Banking Association does not comment on the petition filed with the Constitutional Court last week against the early repayment law, but Good Finance has learned quite a few details about the document. Below, based on our information, we summarize the substance of the petition, which was requested by the Good Banking Association for out-of-court discussion.

The final repayment is the 2011 CXXI. The Association has requested that it be retroactively annulled. According to the banks, the primary issue is the procedural rules, as they are a serious violation of the law, as they were created without prior impact assessment and without mandatory consultation. In addition, neither the method of parliamentary approval nor the accelerated entry into force were in line with the Constitution, and the measure does not take into account the requirement of clarity of norms.

According to the petition of the Constitutional Court, the law can be regarded as unconstitutional in the alternative because it violates fundamental rights. According to the organization, the repayment is severely unconstitutional for several reasons:

Violates Contractual Freedom

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According to the Good Banking Association, the law addresses a non-social problem by focusing on well-off and creditworthy clients without justification. They pointed out that exchange rate changes do not affect creditors unilaterally, nor do they bring profits to banks (who put money out of policyholders and depositors). According to our information, the banks indicated that the possibility of exchange rate fluctuations was foreseeable and not one-way. According to the banks, therefore, the principle of a guaranteed market economy in Article 9 of the Constitution is violated.

Undermining legal certainty

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the law subsequently calls into question the obligation to comply with existing contracts, in breach of the principle of the rule of law enshrined in Article 2 of the Constitution. This causes damage and risks to the operation of the economy as a whole.

Violation of the right to property A claim (credit claim) also means property, so the law also violates the right to property. According to the banks, the damage caused is great and causes imbalances in private property, since the state has not proved that it is an overriding public interest and has not introduced any compensation rules.

Infringement of Equality

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The date of termination of the contract is determined by law to be in violation of the prohibition of constitutional discrimination.

There is no public information yet on the handling of the petition, however, according to constitutional lawyers who previously stated to Good Finance, the government decision on early repayment, which not only with the Constitution in force but also with the new Basic Law coming into effect, is indeed blatant.

3 Year Bank Loan

Bank launches a brand new private loan that gives borrowers the opportunity to borrow money up to $ 15,000 for up to 3 years.

A unique private loan

A unique private loan

On March 25, 2014, Bank launched a brand new private loan called the Annual Loan. With the Annual Loan, you can borrow money between $ 11,000 – $ 15,000 for up to 3 years. As a customer at Bank, it is also possible to combine a long Annual Loan with a short sms loan that is from $ 500 – $ 10000 for 30 or 90 days.

This is how the Annual Loan works

This is how the Annual Loan works

The annual loan applies to the amounts of $ 11,000, $ 12,000, $ 13,000, $ 14,000 and $ 15,000. Unlike our Micro Loans and Quarterly Loans, the repayment period on our Annual Loans is over a longer period, more specifically 3 years. To apply for the Annual Loan, you go the same way as when you apply for Micro or Quarterly loans. You fill out the application form and send the application that is processed by our customer service and you will still receive an answer directly on the screen.

New for the Annual Loan is that the monthly repayment is made via direct debit (the money is automatically deducted from your account once a month) and you do not receive an invoice that you have to pay manually. The annual loan is based on a loan method called straight repayment, which means that the repayment amount drops every month.

Good to know

Good to know

When you apply for a Micro or Quarterly loan ($ 500 – $ 10000 for 30 or 90 days), we obtain credit information from the credit reporting company Creditsafe, which means that there is no so-called “UC”. However, the credit information is obtained from the Information Center, UC when applying for an Annual Loan.

We have launched the Annual Loan since there has been a demand for a longer loan. However, we believe that situations can arise in everyday life when you need to solve a temporary financial situation and then it is good to know that you can combine a long Annual Loan with one of our short loans.

In order to be granted an Annual Loan, it is not a requirement that you are a customer of Bank before but also new customers can apply for the maximum amount of $ 15,000.

Who may apply for the Annual Loan?

Who may apply for the Annual Loan?

The annual loan is aimed at Swedish private individuals who need a slightly larger and longer loan. In order to fulfill the requirements to be granted a longer Annual Loan, you need to meet the following requirements:

– at least 20 years

– a fixed income of at least $ 120,000

Excessive spending of money and its consequences – Fast Loan

There is a balance to be struck between everything in life – between work and leisure, work and personal life, the virtual and real world, as well as between saving money and spending money.

Every one of us should make savings. In fact, this is not as easy a process as it sounds, as it requires a lot of patience, willpower and a certain amount of relinquishment of various goods and services.

Why make savings?

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The ability to save money is very positive, because when you may have to lose your job or get into another uncomfortable and uncomfortable financial situation, saving can be the best way to get out of such a situation more successfully. But you must be able to save wisely! Often, today ‘s society misunderstands the term “saving” in any way and saves money even on things that should not be saved, only to make its situation worse over time. Not for nothing is the saying that the stingy one pays twice, so don’t save money on cheap and low-quality goods and under no circumstances on health expenses! It is better to see your doctor in time than to wait for a long, expensive and unpleasant treatment.

Money can only be saved on goods and services that are not really needed and have no impact on the financial situation in the future, such as reducing your spending on sweets, alcohol, or buying really unnecessary clothing. Sometimes you have the following with your clothes: You buy it, go home from the store and you don’t understand what the hell you bought it for. Food is the same: go to the store only when you have enough, otherwise you will buy not only what you need but what you do not need at all.

If you choose the purpose you want to save money on – whether it be a new mobile, a computer, a winter coat, a trip, etc. – then it will be much easier to save money, as most financial advisors find the best motivation to save money goal setting.

What, then, is excessive spending of money?

What, then, is excessive spending of money?

All primary expenditures relating to medicine, health, food and housing cannot necessarily be regarded as an excessive waste of money, since they are, after all, the basis of human existence to function in any way.

The worry of spending too much money is when you spend it on an unconscious amount of secondary goals – clothing, footwear, travel, expensive hotels, various entertainment activities and trips. Of course, this spending is also necessary, but it is not necessary to make the extremes that people often succeed in some way.

Consequences of spending too much money

Consequences of spending too much money

Unfortunately, many people today suffer from financial problems. Similarly, many live beyond their means. What does it mean? They are unable to make ends meet and borrow monthly from friends, relatives or, in the worst case, from credit institutions, to make fast loans to meet all their wishes and desires. Getting out of such a circular circle is not so easy, because in order to get something you have to give up something, which can be particularly difficult in such a situation.

By living beyond your means, anyone can find themselves in a situation where it is impossible to pay their mandatory expenses, from rent, utility bills, transportation costs to health payments and food, so it is important to think about your finances to find the balance between spending money and saving.

Deductible loan costs and interest

To take out loans is to acquire assets at the same time while at the same time obtaining expenses in the form of interest and fees. You have to pay tax on assets in Sweden, but if assets also entail expenses, such as interest rates undeniably do when it comes to loans, then you have the right to make deductions for these, so-called deductible loan costs. The reason for this is many, among other things, to encourage people to invest, for example in housing, which generates tax revenue. Someone is going to build these homes, someone is going to renovate them and someone is going to broker their sale. Thus, it is believed that deductible borrowing costs are good for the social economy, so they exist.

 

What loan costs are deductible?

What loan costs are deductible?

In principle, all borrowing costs are deductible regardless of size and purpose. However, it may be smart to take an extra check if you feel unsure before settling with the declaration, or better yet, before taking the loan. Auditors can help with this, or why not the Swedish Tax Agency, the most important thing is to look up at a credible source. Often, deductions are something that lenders use from a marketing standpoint and since they want satisfied customers, you will be told the right facts.

If you want to take out a loan to buy a home, then these loan costs are deductible. Likewise if you intend to take out a loan for private consumption. The same goes for fast loans or if you want to take out a loan to buy a car or boat. Thus, most borrowing costs are deductible.

 

Difference between loan costs

Difference between loan costs

It is important to remember that there are borrowing costs and borrowing costs. Interest rates are certainly tax deductible, but you must not forget that there are other fees as well. Examples of these are set-up fees and newspaper fees which are an expense for the borrower but not for the sake of deductible. Another cost that must not be forgotten in this context is amortization. These are also not deductible, which can be good to keep in mind when negotiating how big one’s repayments should be.

 

Differences between loans

Differences between loans

Since some borrowing costs are deductible and others are not, what you will have to deduct will vary some depending on the type of loan you take. For example, if the loan is for your accommodation, an acquisition of a condominium or a villa, then you can deduct the interest costs. If you take out a sms loan then the situation may be different, depending on how this is laid out. Some quick loans or sms loans pay interest, so these costs are deductible. However, if you have missed an offer on interest-free loans, a loan for which you instead have to pay fees, then you can no longer talk about deductible loan costs and you can tax more.

 

Important to remember

Important to remember

To put it simply, interest rates are deductible when it is time to declare. However, it must be borne in mind that there are some details and exceptions to the rule that can be costly if you expect to be deducted for them.
An example is something that most people become aware of, namely that the interest rates on one’s CSN loan are not deductible. Since this is many of the first big loans, it may be smart to keep this in mind.

If you have a loan whose costs you want to deduct, then you have to be personally responsible for the payments on this. For example, if your mortgage is on your partner, you cannot deduct the costs, even if you pay for them.