Press release 18 December 2025
Macroprudential decision: No change to housing loan cap and countercyclical capital buffer requirement for banks
The FIN-FSA Board has decided to keep the housing loan cap at its standard level of 90% and the cap for first-home loans at 95%. Moreover, the Board decided to keep the countercyclical capital buffer (CCyB) requirement for banks at 0.0% and to continue the application of Sweden's risk weight floors to Finnish credit institutions’ housing loan exposures and corporate exposures secured by real estate in Sweden.
Uncertainty related to global economic developments has decreased slightly, particularly as a result of the trade agreements concluded by the United States. However, volatility in international financial markets has recently increased reflecting high valuations. According to the Bank of Finland's September interim forecast, domestic growth will accelerate to 1.3% next year and further to 1.7% in 2027.
Housing loan cap remains at its statutory standard level
The cyclical situation of the housing market has strengthened slowly. House sales and mortgage drawdowns have picked up from the two previous years, but volumes remain low. The cyclical situation of the housing market is expected to continue strengthening gradually as the uncertainties ease, the economy and confidence in the economy strengthen, and the purchasing power of households and investors improves. Vulnerabilities associated with household indebtedness and housing lending have also eased in recent years. Nevertheless, structural vulnerabilities related to indebtedness remain.
-Threats to confidence in the financial markets currently stem primarily from international markets, where valuations have become high by historical standards following recent price rallies. In these circumstances, deteriorating confidence could in the short term also have adverse effects on the Finnish financial system, states Marja Nykänen, Chair of the Board.
The housing loan cap, i.e. maximum loan-to-collateral ratio, remains at its statutory standard level of 90%. The cap for loans taken out for the purchase of a first home also remains unchanged at 95%.
CCyB for banks also unchanged
Based on developments in the core risk indicators for the CCyB, the financial cycle remains subdued. In the second quarter of 2025, the value of the primary risk indicator, i.e. deviation of the private sector credit-to-GDP ratio from its long-term trend, was -18.0 percentage points. Aggregate lending remains sluggish although corporate and household loan stocks have recently turned to very cautious growth. Other core risk indicators point to any significant increase in cyclical systemic risks, either, so there are currently no grounds to apply a countercyclical capital buffer requirement.
Application of risk weight floors for Swedish exposures continues
The Swedish macroprudential authority (Finansinspektionen) has decided to extend the validity of risk-weight floors for housing loans and corporate credit secured by residential and commercial real estate collateral and granted by credit institutions applying so-called internal models. At its meeting, the FIN-FSA Board decided to continue reciprocating the risk weight floors set by Finansinspektionen to apply to Finnish credit institutions’ exposures in Sweden.
The Board of the Financial Supervisory Authority assesses on a quarterly basis the short and long-term risks to the stability of Finland’s financial system. If necessary, the Board may tighten or relax its macroprudential instruments for promoting stability. The Board decides on a quarterly basis the level of the countercyclical capital buffer (CCyB) and the level of the maximum loan-to-collateral (LTC) ratio for housing loans. The levels of additional capital requirements for nationally systemically important institutions (O-SII buffers) are reviewed at least annually and the level of the systemic risk buffer (SyRB) at least every second year.
For further information, please contact:
Marja Nykänen, Chair of the Board of the Financial Supervisory Authority, tel. +358 9 183 2007
View this link to access the appendices listed below
- The FIN-FSA Board’s decision on the application of macroprudential instruments (PDF)
- Proposal of the Director General of the FIN-FSA, circulated for comment, on the application of macroprudential instruments (pdf, in Finnish)
- Opinions concerning the Director General’s proposal on the application of macroprudential instruments (PDF, in Finnish)
- Bank of Finland
- Ministry of Finance
- Ministry of Social Affairs and Health
- Macroprudential report 2/2025 (in Finnish)
Contacts
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Media phone service number, +358 9 183 5030
About Finanssivalvonta
Finanssivalvonta, or the Financial Supervisory Authority (FIN-FSA), is the authority for supervision of Finland’s financial and insurance sectors. The entities supervised by the authority include banks, insurance and pension companies as well as other companies operating in the insurance sector, investment firms, fund management companies and the Helsinki Stock Exchange. We foster financial stability and confidence in the financial markets and enhance protection for customers, investors and the insured.
