Demand for long-term mortgages rises in Finland

A quarter of OP Uusimaa’s mortgage applicants now choose terms exceeding 35 years, the bank reports, following a June legal change that extended maximum mortgage durations to 40 years.

Joonas Hiltunen, a 35-year-old IT professional in Tampere, opted for a 35-year mortgage on his €320,000 apartment in 2021. The longer term reduced his monthly payments, freeing up €250 a month to invest in stocks—a strategy he maintains despite rising interest rates and geopolitical uncertainty.

“As long as stock returns stay around 6%, I’m not worried,” Hiltunen said. He calculates that his current €1,000 monthly payment on a €261,000 balance will clear the debt by retirement age, while diversifying his assets beyond property.

Longer terms significantly increase interest costs. For a €200,000 mortgage at 3.5% interest, extending the term by a decade to 40 years adds nearly €50,000 in interest payments.

Nordea and OP Uusimaa confirm growing demand for extended mortgages, citing customer preference for lower monthly payments and investment flexibility.