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Aktia forecasts mortgage interest rate rise

Finnish interest rates will edge up by 0.5 to 1 percentage points within the next year, predicts a leading bank economist.

kerrostalo torkkelinmäellä
Image: Esko Jämsä / AOP

Aktia Bank is forecasting that mortgage interest rates will rise next autumn.

According Aktia’s head economist Heidi Schauman, interest rates will rise 0.5 to 1 percentage points within the next year.

Those rising interest rates will be evident in mortgages in Finland next fall, predicts Aktia in a press release. Schauman estimates the development will be moderate, with no quick rise expected.

The era of zero interest rates is estimated to end "sooner rather than later," according to Aktia.

At the end of October, Nordea estimated that Finland's most common mortgage rate, the 12-month euribor, would begin to rise by spring.

Possible rate hike not dampening enthusiasm for housing loans

Meanwhile, Aktia’s Schauman predicts that the higher 12-month euribor will start to show in Finnish loans next fall.

According to Aktia, the possible rise has not yet dampened Finnish enthusiasm for taking out housing loans. Real estate sales continue as per normal and the prices of apartments are following current trends, which in the capital region and growth centres are rising, while in more remote areas the prices are dropping.

The Finnish Mortgage Society reported last year that there was a cautious mood in the housing market. According to their Housing Market Review, trading is brisk, but prices are stagnating in the Greater Helsinki area, and purchasing power is scarce compared to the positive economic situation.

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