Latest articles and blogs
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Mortgage borrowers have proved resilient against the interest rate risk of their loans
Finnish mortgage borrowers coped well with their loan servicing costs during the period of steep rises in interest rates. Borrowers should ensure they are prepared for various kinds of financial risks in the future too.
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New housing loans keep growing in size – increased share of longer-than-usual loans
Housing loans are larger and of longer duration than previously. Borrowers should not take on too much debt, so that a rise in interest rates or everyday expenditure will not squeeze their finances too tightly.
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Nordic housing market showing strength, but not without risks
Housing and real estate trading has continued despite the economic uncertainty. The rapid rise in prices and lending growth are increasing the vulnerabilities of Nordic banks.
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New mortgage-borrowers have an increasing amount of debt relative to income
A larger share than before of new housing loans have been granted to highly indebted households. Large amounts of debt are particularly common among households in the growth centres. A debt-to-income cap would rein in excessive indebtedness.
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Nordic countries are vulnerable to housing market risks aggravated by the coronavirus pandemic
The coronavirus pandemic has the potential to aggravate long-standing vulnerabilities in the Nordic housing market. Housing market disturbances can increase credit risk for banks and interfere with their access to funding.
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The highly indebted cut spending as the economy slows
The more debt households take on during an economic upswing, the more likely they are to cut consumption when the economy begins to run out of steam.
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Risks on the Swedish housing market also a cause for concern in other Nordic countries
An extensive materialisation of risks on the Swedish housing market could also have notable effects in the other Nordic countries.
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Wide regional disparities in Finnish house prices and household indebtedness
Housing debt has grown, both in absolute terms and relative to income, especially in growth centres, where housing is more expensive and subject to greater pressures from demand than elsewhere.
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Household indebtedness contributing to corporate loan losses
When indebted households cut their spending during an economic downturn, this also increase the financial difficulties of non-financial corporations.
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Risks in long-term and large home loans – Sweden's worry is also ours
Households in both Finland and Sweden are carrying a record level of debt relative to their income.
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High housing debt increases risks to financial stability
In Finland, the volume of housing loans is large compared with other bank lending and the capital requirements on the banks. Vulnerability is further increased by the relative size of household debt and the tendency for assets to be held in housing.
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Nordic financial sector vulnerable to housing market risks
Realisation of potential housing market risks would simultaneously increase loan and investment losses while also pushing up the price of funding.