FSA has proposed that the Ministry of Finance make rules that are tightening their lending standards for home buyers.
The borrower must be able to withstand an interest rate increase of 6 percentage points compared to 5 percentage points in the current rules. A so-called “special justifiability assessment”, will no longer be able to justify deviation from this requirement.
It should be possible to borrow up to 85 percent of a property’s value, now. It is possible to borrow more mortgage other property, now. but “special soundness rating” or surety / guarantee, for example from parents, falls away as the basis for borrowing more.
A new requirement is that any borrower over 65 percent, should pay at least 2.5 percent of the loan in annual installments. The requirement for repayment is not quantified in the current rules.
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