Finland's Ministry of Finance proposes longer 35-year mortgages, a 95% loan-to-value cap and cyclical rules for housing company loans

Finland's Ministry of Finance submitted a government proposal to Parliament to adjust housing finance rules aimed at supporting the housing market and construction. The package would extend the maximum maturity for new mortgages and change loan-to-value and housing company financing rules. Under the proposal, the maximum maturity for new mortgages would rise to 35 years from 30 years. The Financial Supervisory Authority would be permitted to cap mortgages at up to 95% of the home’s value for all homebuyers, compared with the current cap of 90% for everyone except first-time homebuyers. For loans to housing companies in new construction, the framework could be adjusted by decree in response to the economic cycle, with parameters including borrowing of up to 60–70% of the debt-free price of homes sold, repayment holidays limited to 1–2 years, and maturities capped at 30–35 years. The Government proposed that the amendments enter into force at the beginning of April.