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Same in Norway. Here, banks are required to deny mortgages to people who they do not see as being able to handle much higher rates than on the date the mortgage was taken. Is that not the case in Sweden?

(I personally think they should test for even higher rates – I'm terrified to see how many people are in absolute shock that rates are rising rapidly, after being told that exactly that will happen for years)

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I think you overestimate the sophistication of the models the banks use. There's no reason for them to use honest models. If things turn to shit, the public will bail them out anyway.

So the banks may well say "if you spend a minimum on food and clothing, and nothing on anything else, you can afford to pay high rates." But that's not what regular people would mean by affording it.

Fair enough, but that doea still mean that higher rates are factored in. Not just as well/strongly as you and I would like.

It's the same case in Sweden, all new lenders have to be able to handle rates of 6-8%.

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