Swedish banks say rate fall making borrowers complacent

Stockholm

MORE than three years of falling interest rates have made Swedes complacent about the risks of household debt costs, the nation's biggest lenders said.

That's evident in the mortgage market where the majority of borrowers are taking flexible-rate loans even as long-term rates hit historic lows. About 60 per cent of clients at Svenska Handelsbanken AB's Stadshypotek unit, the second-largest mortgage lender, pick short-term adjustable loans.

"The market is too heavily tilted towards three-month contracts," Ulrica Stolt Kirkegaard, the head of the unit, said on Jan 12. "Not all Swedish households have a good enough economy for such a high share…