Finnish government eases housing company loan rules despite high maintenance fees

A one-bedroom apartment in Tampere is currently on the market with monthly maintenance fees exceeding €1,400 due to housing company debt—yet the Finnish government is pushing to further loosen loan conditions for housing cooperatives, Yle reports.

The cabinet decided in its recent budget session to increase the maximum loan-to-value ratio for housing company mortgages from 60% to 70% of the debt-free property value. The maximum repayment period will extend from 30 to 40 years, and the interest-only payment period will double from one to two years. Critics warn the changes shift financial risk from developers to buyers, with some apartments already carrying fees over €1,000 monthly due to collective debt.

Experts like Mari Vaattovaara, professor of urban geography at the University of Helsinki, argue the reforms may backfire, deterring buyers rather than stimulating the market. “Homes have become financial instruments,” she said, noting that while lenders, construction firms, and investors benefit from risk dispersion, individual buyers bear the ultimate burden. Timo Metsola, chair of tenant advocacy group Vuokraturva, warned that shared liability in heavily indebted housing companies could leave owners vulnerable if neighbors default.

Real estate agents, however, largely welcome the changes. Janne Särkkä, CEO of Sisä-Suomen OP Koti, noted many buyers immediately repay their share of the housing company loan with a personal bank loan to avoid exposure. Yet Finanssiala, the finance industry association, emphasized that even personal repayment does not absolve owners of collective responsibility for the loan.

Vaattovaara dismissed the policy as a “marketing gimmick” to make debt-laden apartments appear cheaper, masking true costs. She warned that expanding debt-financed construction could attract buyers overstretching their finances, exacerbating market instability.