A stable, well-functioning financial market for allA stable, well-functioning financial market for allReport: Banks’ administration of amortisation requirement exemptions
Finansinspektionen has conducted a survey into banks' administration of amortisation requirement exemptions, as an assignment from the government. The survey shows that banks have primarily handled amortisation requirement exemptions well. Banks have improved their procedures for handling exemptions, which have increased due to increased pressure on households' finances and more widespread knowledge within society about the possibility of receiving an exemption. The banks' improved procedures are an adjustment to this change.
The assignment originated against the backdrop of high inflation and higher interest rates, which are putting pressure on households' personal finances. Given these circumstances, it is important to use the flexibility in the regulatory framework and that banks grant exemptions from the amortisation requirements when justified. FI will continue to monitor the banks' handling of amortisation requirement exemptions.
The possibility for banks to grant exemptions from the amortisation requirements given special grounds has been in place since the amortisation requirement was introduced in 2016. Special grounds refers to mortgagors experiencing a significant deterioration in their financial circumstances.
It is the bank that decides in each individual case whether or not to grant a temporary exemption. One requirement that must be met for the bank to grant an exemption from the amortisation requirements is that the circumstances justifying the exemption must have occurred after the borrower received the mortgage and therefore may not have been present at the time the mortgage was granted.
Additional requirements are that the exemption must fall within the framework of good lending practice and that the bank must perform an individual assessment of the borrower's conditions. Such an assessment must be based on adequate information about the borrower's situation, for example current information about the borrower's income, expenses and savings.
