Sweden's right-of-centre government said on Thursday it would ask the financial watchdog to investigate if rules limiting how much households can borrow in relation to the value of property could be eased.

Currently, it is possible to borrow up to 85% of the value of a new home, but the government has asked the financial supervisory authority to look at whether this could be raised to 90%.

The government said the current loan-to-value ceiling made it difficult for first-time buyers, especially young people, to get onto the housing ladder.

Households in Sweden are among the most heavily indebted in Europe when it comes to mortgage borrowing and the central bank - among others - has warned that this is a major risk to financial stability. (Reporting by Simon Johnson, editing by Stine Jacobsen)