Government defies advice from supervisors, does not adjust mortgages – E24

– Today’s regulations work well. So, I don’t see any reason to adjust, Sanner says in a statement.

– Especially now that many are experiencing greater uncertainty about their financial future, and we have seen more moderate debt growth over the past year, he adds.

Therefore, it has been decided that the government will continue with the current mortgage rules as of January 1, 2021.

This means, among other things, that the current ceiling for loan amounts remains unchanged at five times gross income, contrary to the recommendation ordered by the Ministry of Finance from Finanstilsynet.

Discouraged True: – Wise

It was in September when the audit advised the government to further toughen mortgages starting in 2021. The audit proposed that the maximum borrowing limit be lowered from the current 5 to 4.5 times income.

In addition, the Authority proposed that the so-called flexibility quota of banks be drastically reduced from ten to five percent throughout the country.

Banks can use the fee to grant mortgages to applicants who do not meet the regulatory requirements. A reduction in the fee would force them to reject more loans.

The Authority’s proposed toughening has met with opposition from almost everyone who has had an opinion on it.

And now it is clear that the government is giving its thumb down too.

– It is wise of the Finance Minister, says NEF director Carl O. Geving, to E24.

He and the brokers union had warned the government in advance in their consultation response that the supervisory board involved a tightening so severe that it could trigger a further decline in house prices.

Valid for four new years

Even if the mortgage rules remain unchanged, they will now be merged with the rules for consumer loans in a new common loan regulation. This is in line with the advice of the Danish Financial Supervisory Authority.

Sanner affirms that the current credit rules will remain in principle in this new regulation for four years, “but with an evaluation midway.”

– In this way, we give predictability to both individuals and banks, at the same time that it forces a periodic evaluation of whether the requirements are well adapted to the market situation, says the Minister of Finance.