In Sweden, the norm is for mortgages to be issued by banks. But new players, known as mortgage credit companies, are now challenging this norm. A new Economic Commentary describes the development of these new players in Sweden and draws comparisons with mortgage markets in other countries. The Commentary also describes how mortgage credit companies affect household mortgages and how they might affect the Swedish mortgage market in the future.
Over the past year, lending by mortgage credit companies has steadily increased despite there being only a few of them issuing mortgages. Their lending does not currently affect total lending to households to any significant degree, and it is difficult to predict how mortgage credit companies will affect the Swedish mortgage market and households going forward. But if their loan volumes continue to increase, they may have a greater effect in the future. They are probably already having an impact by increasing competition and pushing down interest rates.
By Nina Engström, who works at the Monetary Policy Department of the Riksbank.