Strong rise in interest rates puts strain on mortgage borrowers
Voutilainen, Ville; Honkanen, Johanna (09.06.2023)
JulkaisusarjaBank of Finland. Bulletin
JulkaisijaBank of Finland
Julkaisun pysyvä osoite onhttps://urn.fi/URN:NBN:fi-fe2023061354410
The long-continued growth in household indebtedness came to a halt at the end of 2022. Households were borrowing less as a result of the rapid rise in interest expenses and the cost of living, together with uncertainty about the economic outlook. Household debt is nevertheless still at a very high level. The majority of new mortgages are variable rate loans, and a modest amount of these are taken out with interest rate hedging. Interest rate hedging is used least by the highly indebted. The increase in households' debt servicing expenditure and the higher cost of living has meant that more and more households are having to think carefully about ways to balance their finances.
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