A recent analysis by HS sparked a debate on the best mortgage repayment methods in Finland. According to Beurling-Pomoell, general secretary of the Consumers’ Association, banks should do a better job of explaining the different repayment options available to consumers. An annuity loan is the most popular form of loan in Finland, with 81 percent of new mortgages being annuity loans last year, according to the Financial Supervisory Authority and Bank of Finland.
This type of loan involves changing repayment installments based on interest rate fluctuations. In contrast, fixed installment loans have consistent repayment installments, and equal repayment loans have a consistent total loan repayment. However, consumers need to understand that each loan option has its own advantages and disadvantages, emphasizes Beurling-Pomoell.
Sanna Atrila, a leading lawyer at the Financial Supervisory Authority, asserts that all loan options should be clearly presented to customers to ensure freedom of choice. Consumers are encouraged to educate themselves about various loan repayment methods and potential risks before entering into a home loan agreement. Understanding how changes in interest rates can impact repayments is crucial for making informed decisions when securing a home loan.
