Hypo: A new incentive trap makes it difficult to sell housing in Finland

Hypo: A new incentive trap makes it difficult to sell housing in Finland

“Swapping your home usually means swapping the collateral, and you can’t bring the fixed interest rate you previously negotiated to another bank. By postponing the decision to move, you can save hundreds per month,” the review reads.

The trap already touches a million people, because the sharp rise in reference interest rates has made the interest rate hedges purchased at lower reference rates affordable.

About 300,000 Finns currently benefit from fixed interest rates and interest rate caps, he says Juho Koskinen, Hypo’s economist. Another 700,000 mortgage borrowers are waiting for their interest rates to be adjusted due to the rise in reference rates, so around a million people are currently discouraged from changing homes.

Although the trap will crumble on its own in the next six months or so for those waiting for the adjustment date, those who have fixed their interest rates can wait longer.

Hypo stated on Friday that the gloom of the housing market is already comparable to that observed during the financial crisis. National sales volumes have fallen by more than a third and apartment prices have fallen by almost four percent from last summer’s peaks.

After more than 13 years of consecutive gains, rates will fall below the level of the first half of 2020, a mortgage expert predicts. Although the housing market wakes up from hibernation in the summer, the rise in prices will take a little longer.

Aleksi Teivainen – HT

Source: The Nordic Page




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