Tuesday September 21, 2021

Finnish households draw down €2.2b housing loans in June

Published : 03 Aug 2021, 00:49

  DF Report

File Photo: Business Finland by Emilia Hoisko.

In June 2021, Finnish households drew down new housing loans to a value of EUR 2.2 billion, which is EUR 358 million more than a year earlier, said the Bank of Finland in a press release on Monday.

Of the new housing loans, 8.5% were for investment. At the end of June 2021, the stock of housing loans stood at EUR 104.9 billion, representing annual growth of 4.3%.

The share of the housing loan stock taken by housing for investment purposes was 7.9%. Of Finnish households’ loans at the end of June 2021, consumption loans totalled EUR 16.6 billion and other loans, EUR 17.7 billion.

The Finnish households drew down new housing loans for the purchase of holiday homes (holiday cottage loans) to the value of EUR 151 million in June.

More has been drawn down in a single month for this purpose only once before, in June 2020, when new drawdowns were 1.9% higher. In June 2021, the average interest rate on new housing loans for purchase of a holiday home was 0.93%.

New holiday cottage loans have been drawn down at a record rate throughout the entire first half of 2021.

During the second quarter of the year, drawdowns were 20% up on the second quarter of 2020. Overall, in the first half of 2021, a total of EUR 600 million in new housing loans for holiday residences was drawn down, which is as much as 31% more than in the same period in 2020.

The large number of drawdowns saw the stock of holiday cottage loans grow to EUR 4.3 billion in June 2021, an annual growth rate of 12.4%. Holiday cottage loans’ share of the overall stock of household loans has risen slightly from 2020, to stand at 3.1% in June 2021.

The repayment periods for new holiday cottage loans have been lengthening since the middle of 2014, and this trend has continued during the past year. The average repayment period on holiday cottage loans drawn down in June 2021 was 18 years and 8 months, 10 months longer than a year earlier.

In June, Finnish non-financial corporations took out new corporate loans (excl. overdrafts and card credit) in the amount of EUR 2.6 billion. The average interest rate on the new corporate loans was down from May, at 1.43%. At the end of June, the stock of loans granted to Finnish non-financial corporations stood at EUR 96.7 billion, of which EUR 38.0 billion was to housing corporations.