So we are looking at buying a house again. We do this periodically, but let's just say I am afraid of commitment. The Swede and I are polar opposites on this subject, and I like to hope that will mean we will eventually make a great compromise. I LOVE to look at houses and dream about living in them, but the thought of buying one scares the living bejeebus out of me. The Swede falls in love with practically every house we see and is seriously disappointed every time we end up not making the purchase.
So here are my fears about buying a house in Sweden:
1) The housing market reminds me of the American housing market circa 2008 - Prices just seem to keep going up. They cannot go up inevitably. We live in a HCOL area. I don't think they will come down much. And I don't look at buying a house as an investment. And thankfully people here don't own 3 houses at a time, like they did in the peak in the US. But really there must be a limit. Incomes don't vary too much here, who are these people who can afford these homes?
2) No one in my generation seems to actually own their houses - They just pay interest on their 'bottom loans' and only work to pay off the top loan, which is like 20% of the loan. Which means, for me anyway, that you are just always renting your house from the bank. Seriously, you do not have to amortize your bottom loan. Crazy pants. (FYI You can take out a bottom loan for about 70-80% of your home's value).
3) You cannot get a fixed interest rate for more than 10 years, and you are discouraged from even taking that - There is a huge difference between the long term interest rates and banks encourage you to take the variable interest for the WHOLE sum. Again... crazy pants. Thankfully you can buy insurance to protect yourself from too much movement in the rate, but still, I WANT MY 30 YEAR FIXED MORTGAGE RATE!!!!
4) You buy it you own it - Sure you may be permanently indebted to the bank, but you are permanently indebted to the bank. What I mean is, even if your house loses value, you owe the set amount to the bank. Foreclosure smorclosure. You owe the money NO MATTER WHAT. You would think this would make the banks a little more careful. Nope. Not so much.
I get that this is how the Swedish market has worked for ages. I get that, despite a bit of chaos in the 90s it seems to have survived. But I still feel like my generation ends up being the one totally f-d by this system. Because we are the first to be sitting around with over 2 million crowns in debt, on average. What happens if things turn sour?
Do you get why I am so terrified to buy a house? Even if today we totally looked at what could be a dream home?