The Newbie Guide to Sweden

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How to compare and get a mortgage in Sweden

There is a lot to consider when you are buying a home and a mortgage. It’s tricky business anywhere on earth and Sweden is no different, although a lot is regulated which means that there is potentially less things to worry about. In this article we will focus on one important aspect of buying property, the loan you may need to get in order to buy your house. In other words, the mortgage. 

So here we are going through a couple of things related to a mortgage in general and some that is specific to Sweden.

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1. Make a mortgage calculation

The first thing to do is a mortgage calculation. What do your income and expenses look like? Do you live alone or with someone? Most banks offer a mortgage calculation service on their websites and with this calculation you get an idea of how much you can borrow and what you can afford to buy. Look at the prices in the areas you want to live. Then calculate how much money you can contribute directly. In Sweden you will need to have at least 15 percent of the property price in hand in order to get a property loan.

Once you know your loan amount, you calculate the interest cost. Calculate with different interest rates so that you can see how your cost changes if the interest rate goes up. According to the repayment rules in Sweden, you must repay about 1-2 percent of the loan if the loan exceeds 50 percent of the home’s market value. Also, do not forget that you pay a fee every month to the tenant-owner association in addition to interest and repayments.

2. Compare your loan possibilities

We don’t all get the same deals from the banks. After all, our loan is their business and they want to make sure they get their money’s worth out of it. This means that different banks can and will offer different interests rates, deals and set ups for you. So in order to get the best deal, you will have to shop around. One problem with asking each individual bank what THEIR deal for you would be is that each time they will check your credit score and as many of you know, a lot of checking of the credit score – will bring the credit scores down. So how do you solve that? Cue – the loan comparison services. These services are fairly easy to use:

  • You visit their website and find the section called “Låna till ny bostad”. Most websites are largely in Swedish.
  • You will need to log in using a Swedish BankId.
  • You fill in information about yourself, your partner and family (if you have any), your job and financial situation.
  • You fill in information about the type of property you are looking for, how much money you can spend and how much money you have.
  • Your application is taken care of by a real person who will check the options for you specifically.
  • They usually get back to you within 24 hours.
  • If you choose one of the options, they will help you with the practicalities.
  • It is free of charge to send in the comparison request.
  • And as mentioned before, your credit is only checked once even if you get a bunch of options back. When you compare loans, you’ll have the opportunity to review interest rates, loan terms, and the types of developers they collaborate with. Additionally, you can gain a clear understanding of your monthly payment obligations.

Loan comparison service and financial advisors

  • Lendo* – a comparison site that only does one credit check and connects you with a large amount of banks and loan offers.
  • Söderberg och partner* are financial advisors who also offer mortgages. They specialize in fast and personal service which can be a bit of a perk if you are a newbie in Sweden and need someone to turn to for advice.
  • Compriser* – The information on Compricers website is in Swedish but Google Translate should help you. To get started chose the button in their top menu called “Bolån” and then “Låna till ny bostad” (borrow to new property). Then activate your Google Translate so you can answer their questions. You login with BankId.
  • Comparia allows you to compare up to 150 lenders and 24 loan brokers. And there is a lot of information you need about borrowing money in Sweden.

You can also check with your own bank of course or with any of the Swedish banks such as Nordea, Handelsbanken, Swedbank, Santander Bank etc.

2. Apply for a loan promise

Once you know the size of your mortgage, the max cost of your future property and the expenses you can handle, it’s time for the next step. To contact the bank where you got the best deal to get a loan promise – lånelöfte. A loan promise is a message from the bank that shows how much you can borrow. It costs nothing to get a loan promise and it is not binding. The loan promise is usually valid for six months and is based on your finances. Loan promises gives you an idea of ​​what your financial framework looks like before bidding.

4. Set a maximum bid limit

You’ve found a place you like and you want to place a bid. The most important thing before you place a bid is to decide where your maximum bid limit goes. Stick to it, do not forget the amount in the loan promise even when the bidding goes haywire and you are overwhelmed by your feelings for the apartment. A bidding can be an emotional roller coaster, be prepared for that. And remember, your offer is not binding until you have signed the contract.

5. Have the down payment ready

When you have won the bidding, you should contact your bank who will make an assessment of the home and convert the loan promise into an application for a mortgage. In connection with the purchase, you must pay a down payment that is usually 10 percent of the purchase price.

6. Collect your finances at the bank for better interest rates

When the bank determines the interest rate, they are based on an average interest rate, but you can always negotiate with the bank about the interest rate. You need to show the bank that you are a valuable customer. Can you put more of your commitments in the bank, such as savings, pension savings and insurance?

Make sure you have the cheapest mortgage

A hot tip if you already have a mortgage, is to sign up to Påmind*. This is a free service that keeps track of a lot of different types of contracts and negotiates better prices. Types of contracts they handle are mobile subscriptions, electricity contracts, mortgages, car insurance, broadband, home insurance, private loans. According to Påmind, their users save an average of 2000 sek per year. So definitely worth a try.

Further reading

We have some interesting posts on the subject written by our bloggers. Check them out or scroll down to the related reading section at the bottom of the page.