Finland's Financial Supervisory Authority keeps housing loan caps at 90% and 95% and maintains a 0.0% countercyclical capital buffer

Finland's Financial Supervisory Authority (FIN-FSA) Board decided to keep key macroprudential settings unchanged, maintaining the housing loan cap at its statutory standard level of 90% and the cap for first-home loans at 95%. It also kept the countercyclical capital buffer (CCyB) requirement for banks at 0.0% and continued applying Sweden’s risk weight floors to Finnish credit institutions’ housing loan exposures and corporate exposures secured by real estate in Sweden. The decision was taken against a backdrop of a slowly strengthening housing market cycle, with house sales and mortgage drawdowns picking up from the previous two years but still at low volumes. While vulnerabilities linked to household indebtedness and housing lending have eased in recent years, structural vulnerabilities remain. For the CCyB, core indicators suggest the financial cycle remains subdued, including a private sector credit-to-GDP gap of -18.0 percentage points in the second quarter of 2025 and sluggish aggregate lending, with other indicators not pointing to a material rise in cyclical systemic risks. The FIN-FSA also noted slightly reduced uncertainty around global economic developments, alongside increased volatility in international financial markets and historically high valuations. The Board assesses risks to Finland’s financial system quarterly and sets the CCyB and the maximum loan-to-collateral (LTC) ratio for housing loans on that basis. Additional capital requirements for nationally systemically important institutions are reviewed at least annually and the systemic risk buffer at least every second year.