Converting data into useful information is one of the strengths of the Bank of Finland and the Finnish Financial Supervisory Authority (FIN-FSA). The Bank of Finland and the FIN-FSA have introduced a joint centre of excellence for advanced data science – the Analytics Center of Excellence, or ACE for short.
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Fewer new housing loans have been taken out with interest rate hedging. Hedging products are used least by the most highly indebted.
Risks associated with housing company loans are increasing – Regulatory reforms will restrict use of such loans in the future
The increase in household and investor indebtedness from housing company loans has been a concern to the authorities. Housing company loans still account for a considerable share of the financing for new homes, but new legislation will start to curb the level of debt incurred via housing company 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.
If prolonged, the war can weaken the profitability of the corporate sector. It will be harder for companies to service their debts, if energy continues to be expensive and their products and services do not earn as much as before.
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.
Imposing a loan-to-value limit on housing company loans would only affect a share of construction finance
Housing company loans are increasing household indebtedness and altering the structure of debt. A loan-to-value limit of 60% would reduce housing-purchasers’ substantial accumulation of debt via housing company loans.
The indebtedness of Finnish households relative to income has grown considerably since the turn of the millennium. A proportion of new residential mortgage holders have a heavy debt burden relative to their income.