Large regional variations in household indebtedness
News A new economic commentary describes the variation in indebtedness across Sweden. It shows that households in metropolitan areas are the most indebted while the average loan-to-value ratio for house-owners is lowest in these areas.
Lending to the household sector has doubled since 2007, but household indebtedness varies considerably among different regions in Sweden. The percentage of the population with a mortgage, the average debt level and the average debt-to-income ratio are highest in metropolitan areas, where housing prices have increased the most. The rapid housing price increases in metropolitan areas in recent years has contributed to an overall rise in household debt-to-income ratios and a small reduction in the loan-to-value ratio. At the same time, however, the average loan-to-value ratio for house-owners is lowest in metropolitan areas.
This economic commentary presents the regional variation in indebtedness based on data from the eight largest banks in Sweden. Statistics are presented on the municipality level for:
- the percentage of the population with a mortgage,
- the percentage of mortgage with tenant-owned apartments as collateral,
- the average debt-to-income ratio for households per type of property,
- the average debt-to-income ratio for households per type of property,
- the average market value and the average loan-to-value ratio for house-owners.
The study is based on data collected between July 2010 and July 2016.