Banking's credit for private property purchases - Effects of stricter amortization terms

Background: In recent years, the rise in prices of real estate and condominiums has been extraordinary. At the same time, household debt levels have increased worryingly. A high level of indebtedness in households makes them more vulnerable to fluctuations in the market and can affect their entire private economy. When the upswing is too strong there is an obvious risk of a residential bubble arising. Problem: If the bubble bursts and a fall in prices on real estate and condominiums occur, the entire real economy is affected negatively. A financial crisis particularly affects one of the most important players in the market, the banks. To avoid falling into this situation, stricter amortization rules have been introduced on mortgages. Issue: How does the introduction of stricter amortization rules affect banks' credit for the acquisition of private housing? Purpose: To describe and analyze the effects of the introduction of stricter amortization rules from banks on acquisition of private housing and to find out the acceptance of this product change. Method: To get an answer to the essay's question, a qualitative method with an abductive approach has been used. The same questionnaires have been used for respondents to get a uniform structure both at the interview before the introduction of stricter amortization rules and after. Empirical evidence has been compared with theory and previous research. Then the answers have been interpreted and placed in their correct context. Conclusion: The respondents of the participating banks agree that the introduction of stricter amortization rules did not affect the credit process, as their respective banks demanded payment ability similar to the new rules already before. Acceptance for higher amortization is growing and without this change, housing prices would have been even stronger. Additional time needs to go before evaluation can be made by the effect of stricter amortization rules they claim