Sweden plans forced mortgage payments

Stockholm

SWEDEN'S government has reached an agreement with opposition parties on a proposal that will force home owners to pay off some of the principal on new mortgage loans, in a move aimed at cooling the country's housing market.

Currently, around 70 per cent of Swedish home owners have interest-only mortgages, meaning that they do not pay off any of the principal of the loan that they have borrowed. The country has a household loan-to-disposable income ratio of more than 170 per cent, one of the highest in Europe, and economists have warned that it needs to …