Government proposal
Flexibility to be added to regulation of housing financing
A government proposal aims to support the housing market and construction.
According to the proposal, the maximum maturity period for new mortgages would be 35 years, rather than the current 30 years.
The Government is proposing that the Financial Supervisory Authority be allowed to cap mortgages at a maximum of 95 per cent of the value of the home for all homebuyers. The current cap is a maximum of 90 per cent for everyone except first-time homebuyers.
The proposal would allow the regulation of loans to housing companies to be altered by decree in response to the economic cycle:
- In new construction, housing companies would be able to borrow at most 60–70 per cent of the debt-free price of the homes to be sold.
- The duration of loan repayment holidays could be no more that 1–2 years.
- The maturity period could be a maximum of 30–35 years.
The proposal is based on the Government’s mid-term policy review session. The objective is to promote savings and investments, support the housing market and construction, make it easier for people to change homes and add flexibility to the regulation of housing financing.
The Government submitted its proposal to Parliament on 11 December. The Government has proposed that the amendments enter into force at the beginning of April.
Inquiries:
Iida Hauhia, Senior Specialist, tel. +358 295 530 606, iida.hauhia(at)gov.fi