Household debt – how much is too much?

The trends of the early post-millennium years – a larger average loan size and longer loan repayment periods – have permanently increased household vulnerability to debt-related risks in Finland. Household indebtedness embraces another four features that amplify the risks to the economy: the debt level is high relative to GDP, risks are unevenly distributed, loans are tied to variable interest rates and, in part, loans are large relative to the collateral provided. The stabilisation of debt developments in the 2010s has been positive for financial stability.