29 October, 2018

A complete guide to buying an apartment in Stockholm (Part 2)

Buying an apartment is one of the most serious steps in life. It requires a lot of planning, savings and to be as prepared as possible. On this part two of the series, I will talk about the mortgage and downpayment. To read part 1 click here

Know your Purchase Ability.

Before rushing into apartment visits, you should already have the answer to the following two questions:

Do you have sufficient money (savings) in your bank account? How much can I lend (mortgage) from the bank? To know how much can you get from the bank, follow these steps:

  1. Download a copy of the ‘Downpayment and monthly cost model’ and enter your own figures.
  2. Calculate your Downpayment threshold – determine the price of the apartment you can afford in reality.
  3. Calculate your Total Monthly cost – estimate how much it costs monthly at a realistic property price.

Reality Check #1: Calculate your downpayment threshold 

Your actual wealth is comprised of asset and cash

1) Mortgage (‘Bolån’ in Swedish) – Is the loan that you can borrow from a bank which is going to fund 85% of your property purchase

  • You can borrow about 4.5x your annual income (since Jan 2018). Using an average disposable income of 45,000 KR/ month in Stockholm, one can borrow around 2.4m (=45000*12*4.5).
  • Your loan interest is 30% tax deductible! This means that you get 30% off, paying your interest at a very low and discounted price for owning the entire apartment rather than paying for someone else’s and still not owning any parts of it.

2) Savings in your bank for the downpayment – The downpayment (‘Kontantinsats’ in Swedish) is the initial money you are required to pay when the purchase is made. The money is readily available in your Swedish bank to be transferred to the seller.

  • A minimum 15% of the apartment value is required by Swedish law.
  • Note that if you have a lower income level, you may not be able to borrow enough to cover the full amount of 2.4 m. You will then be required to pay >15% depending on your apartment ‘s price. In that case, choose a smaller and cheaper apartment instead.

So, how much do you need for the downpayment?

Always have money readily available, at least 15% of the downpayment. This amount can change and you may end up paying 25%

  • Being a foreigner, you may not be able to borrow as much with less than 3 years of bank records in Sweden.
  • Your loan might still not be able to cover the full apartment price if you have a lower income or if you desire a bigger apartment

Several hundred thousand KR might sound a lot for a young professional. This is one of the reasons why many local parents buy an apartment for their children to give them when they finish university. However, if you have already been working for several years, then you might possibly be able to have the downpayment by yourself with a smart savings plan.

Your Downpayment Calculator
Max Loan – 5x income (‘000 kr)
Mortgage (‘000 kr) Downpayment (%) Downpayment (‘000 kr) Apt price (‘000 kr)
1,275 15% 225 1,500
1,700 15% 300 2,000
2,125 15% 375 2,500
2,430 (max) 19% 570 3,000
2,430 (max) 31% 1,070 3,500
2,430 (max) 39% 1,570 4,000
Bold*: >15% downpayment required

Request to download your downpayment calculator here.

Using the above scenario of 45,000 KR as a monthly income and a 15% downpayment, you can consider buying an apartment worth of 2.5m with a downpayment of 375,000 KR and a loan of 2.1m (<2.4m of what your bank would allow).

For any apartment of 2.86m or above, you will be paying >15% as your max loan offers only to 2.4m. e.g. 31% of downpayment for a 3.5m apartment.

Try entering your own income level in the calculator now, check the maximum loan you can borrow and the optimal amount of down payment you can handle.

Reality Check #2: Calculate your monthly costs

Your monthly costs for owning an apartment is split into 4 parts:

  1. Mortgage Loan Interest (‘Bolåneräntor’ in Swedish) – Varies according to which bank you choose.
  2. Amortization – This is not really a cost. Simply put, this is the money you slowly pay off the total amount you borrowed (principal) through a monthly period. The amount you pay is around 2% of your loan. Note that after your loan-to-apartment price (/loan-to-value) ratio reaches below 50%, you will no longer need to be paying amortization. The general thumb rule is: ‘Borrowers granted mortgage loans after June 1, 2016 must repay 1% of total loan principal yearly if the loan-to-value (LTV) ratio is 50-70%. If LTV exceeds 70%, the repayment must be 2% of principal’ (SEB, Dec 2018).
  3. Housing Association fee (‘Avgift’in Swedish) – aka management fee for the association who takes care of the building.
  4. Utility costs: This is a small payment. Heating is free in Sweden according to the law. Some buildings come with free water and cheaper wifi package. Internet, insurance and electricity will usually amount to about 500kr/month per person.

The table below shows the total monthly cost when you move in (i.e. loan-to-apartment price ratio >50%)

Currently, most small apartments in Central Stockholm are priced around 2.5-3.5m. Assume that you buy an apartment worth of 2.5m, with a downpayment of 15%, interest of 1.5% and amortization rate of 2%. Your monthly costs are 7,492 tr in total.

However, you will only receive the 30% tax refund on your loan interests (9,563 tr=31,900*30%) at the END of each fiscal year, so make sure you have enough cash flow to pay 8,289 KR each month.

Annual costs (‘000 kr) Downpayment rate 15%
Apartment price 2,500 loan Interest rate 1.5%
Downpayment 375 Amortization rate 2%
Mortgage/Loan 2,125
Interest 32 loan to apartment price/ market price
Amortization 43 85%
Interest/month 2.7 (million kr)
Amortization/month 3.5 Max loan (est. from SBAB) 2.6
Housing Association fee/month 1.6 Max loan (income x4.5) 2.4
Monthly costs 7.8 Max loan (est. from Skandia) 2.5
Internet 0.1
Insurance 0.2
Electricity 0.2
Other monthly costs 0.5
Monthly total 8,289
Less tax (30% deductible on interest)
Monthly total after tax deduction 7,492

The table below shows the total monthly cost when you pay off a good level of loans (i.e. loan-to-apt price ratio <50%)

Annual costs (‘000 kr) Downpayment rate 15%
Apartment price 2,500 loan Interest rate 1.5%
Downpayment 375 Amortization rate 0%
Mortgage/Loan 1,225
Interest 18.4 loan to apartment price/ market price
Amortization 0 49%
Interest/month 1.5
Amortization/month 0
Housing Association fee/month 1.6
Monthly costs 3.1
Internet 0.1
Insurance 0.2
Electricity 0.2
Other monthly costs 0.5
Monthly total 3,622
Less tax (30% deductible on interest)
Monthly total after tax deduction 3,163

As  I mentioned in Part 1, the actual cost of the apartment is only about 3,000 KR/ month. This happens when your loan to apartment price is less than 50%, meaning that you pay off a good level of loans. Then your amortization rate will equate to 0%,  i.e. your monthly amortization amounts to 0.

This way, you are exempted from paying 10,000 KR per year. Your total monthly cost after tax deduction will now be 3,163 KR per month. Now, compare that to your rental costs (12,000 KR/ month)!

If you are still renting, you are basically helping the flat owner repay his/her million KR loan.

After completing this exercise, it’s time to check the market to see if there are apartments in your price range.

Read Part 3 here.

The posts on this Blog are distributed for informational and entertainment purposes ONLY.  Forecasts, estimates and certain information contained here should not be considered as investment advice or a recommendation of any particular security, strategy or investment product.  Past performance is not indicative of future results.  The Author in no way guarantees any specific outcome or profit.  Investments can lose money over short or even long periods of time.  You should consult your financial advisor before making an investment decision.

Teenie Fung
Teenie is a Stockholm-based investment advisor and tech enthusiast. Inspired by the gigantic potential of Stockholm aka 'Unicorn Factory', Teenie left her job from a top-tier bank in Hong Kong and moved to Sweden in 2017.
Prior to that, she worked in different countries across Europe and Asia, challenging herself on cross-border investments and business development. Since the beginning of her new life in Stockholm, she has been actively engaged with high-tech transactions from startups to multi-billion dollar companies in the Nordics.
She's also the creator of an online activewear brand ( and the founder of a fashion community that is still active today in England. At present, Teenie continues to seek for emerging technologies in pursuit of improving everyday living and a better future.

14 Comments on “A complete guide to buying an apartment in Stockholm (Part 2)

20 March, 2019 at 14:18

Hi, Can you tell me how much is the housing association fees i mean how it is calculated. Also, what is the standard insurance cost for homes and loan set up fees charged by bank.

Ada Juraś
21 March, 2019 at 09:40

Hello Anjul,

Unfortunately, we can not provide you with any specific information except the ones included in the article. All the information we have on the subject is already on our website where you can easily find it. You can also join our Facebook group and ask other Newbies there. Take care!

Teenie Fung
3 June, 2019 at 23:52

Hi Anjul, Apologies for the late reply. I am not frequently checking the blog articles. To answer your question, the housing association fee is different for each apartment depending on size, location and the housing associations. You can find the word ‘avgift’ when you look into apartments on hemnet.

Same apply to home insurance, however, it is normally a small monthly cost like around few hundreds for a 23 sqm compare to the loan interest you pay back per month. You can compare prices on Compriser ( once you bought your apartment. It’s not a rush to get insurance until you have signed for an apartment. The cost differs for each apartment, so check the site. IF ( is a pretty good insurance company. Sometimes home insurance also includes travel insurance. Just check if you really need extra coverage.

I am not sure what you meant by loan set up fees, but when you buy your first home, most banks like SEB, Skandia, SBAB and top banks charge you a loan interest that you will pay each month. On top of that, you pay amortization, which is not a cost, because you are basically paying the rest of the money to buy back your apartment. The banks normally earn money by earning loan interests instead of using set up fees. But do call up the choices of your banks and check.

Hope this answers your questions.

11 June, 2019 at 00:39

thanks for the article!
in the top do you really mean ‘disposable income’? – by that, do you mean that is the net average income after taxes for Stockholm?

“You can borrow about 4.5x your annual income (since Jan 2018). Using an average disposable income of 45,000 KR/ month in Stockholm”

Teenie Fung
25 September, 2019 at 00:14

Hi Andrew,

Sorry for the late reply, I have been slow in checking past articles.
Meaning ‘Income Before tax’. The bank normally offers you the ?x depending on your individual credit history, savings and other risks. Please call your bank (even just general mortgage line without applying) to check the estimate they might offer you.



30 July, 2019 at 22:29

Thanks for the article!

I have been trying to download the ‘Downpayment and monthly cost model’ which takes me to a subscription page. I’ve tried submitting my email however I do not receive any emails or download link. Can you please help.

Teenie Fung
25 September, 2019 at 00:17

Hi Peter,

Thanks for downloading. I have been only sending batches of emails out at a certain time due to full time work. You should receive the calculator yesterday. Thanks for the wait. The email subject should be titled ‘A complete guide to buying an apartment in Stockholm – property calculator’.



25 December, 2019 at 00:53

Hi Teenie, May I know when I may receive property calculator? I have enrolled today.

18 August, 2019 at 17:35

I am myself in the process of learning before investing in Sweden.
There is one thing in the Swedish mortgage market which I struggle with:
– where I am from, people tend to reimburse their loan as quickly as they can.
– Swedes seem to be doing the opposite: low amortisation of loans.
Is it that Swedes tend to invest their money elsewhere (stock market or else) instead of reimbursing their loans ?
If that is the case, is it not a risky strategy ?
In case of a crisis, investments in stock market would mostly lose value while variable mortgage rates would increase, right ?

Ada Juraś
19 August, 2019 at 18:29

Hello Greg, thank you for your comment. We don’t give any individual advice here, but you’re more than welcome to join our Facebook group, where you can ask other Newbies who struggle with the same concerns.

Jill millen
3 September, 2019 at 22:25

Hi I have a question. My son who has recently moved to Sweden wants to buy a property with his Swedish girlfriend. We are giving him a substantial amount as part of his inheritance and in the UK we have a ‘Deed of Trust’ to protect his investment. Does Swedish law have anything similar?

Teenie Fung
25 September, 2019 at 23:54

Hi Jill,

Unfortunately I will not be able to provide personal advice. However, in Sweden, many people pay a small price (compare to risking the entire investments) to the local experts here in Sweden and get a contract drafted to specify your terms upon your purchase: check out This is a trusted site that SEB (One of Swedish largest banks) partners with. Please do be aware of the ‘sambo’ law in Sweden can potentially play a role. You can arrange a call with the lawyer and they will advise you on what to draft in your son’s case. If you are a customer of SEB, they will be able to help you arrange the call with the lawyer in Avtal24.



30 October, 2019 at 13:13

What happens when you leave Sweden if you get fired or quit?
Can you keep renting it out for more than a year when you work in other countries?

8 January, 2020 at 12:03

Is it mandatory to have PR(Permanent Residence) status to get Home Loan from a Swedish bank?

I have resident status with a work permit in sweden (local employment, tax history of 3.5 years, good credit status). I applied Home Loan in one of the banks but they rejected saying that they can only give Loan if I have PR and not on work permit.

Can you please share any rules around it.


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