Finnish Financial Supervisory Authority keeps housing loan cap and countercyclical buffer unchanged and reciprocates Norwegian real estate risk weight floors

The Finnish Financial Supervisory Authority’s Board decided to keep the maximum loan-to-collateral (LTC) ratio for housing loans at the statutory standard level of 90%, with the cap for first-home loans unchanged at 95%. It also maintained the countercyclical capital buffer (CCyB) requirement for banks at 0.0% and adopted Norway’s minimum risk weight floors for certain Norwegian residential and commercial real estate exposures of Finnish credit institutions. The decision was taken against a backdrop of weakening economic growth in 2025 and a gradual recovery in the housing market, with new housing loan drawdowns increasing from the prior two years and buy-to-let mortgage lending rising faster in relative terms than owner-occupied lending. The Board noted that household indebtedness vulnerabilities have eased somewhat as aggregate household debt and the housing loan stock have declined relative to growing nominal income. For the CCyB, core indicators did not signal an upturn in the financial cycle, including a private sector credit-to-GDP gap of -16.9 percentage points in the first quarter of 2025, alongside sluggish lending and contracting credit stocks (except loans to housing corporations). Norway’s extended measure runs until the end of 2026, raising the residential real estate risk weight floor to 25% and keeping the commercial real estate floor at 35% for institutions using internal ratings-based approaches. The FIN-FSA reciprocation applies the commercial real estate floor immediately, while the higher residential real estate floor takes effect on 1 January 2026.