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Corona and finances: How to pay your rent or mortgage during the pandemic

Financial advisers say residents financially squeezed by coronavirus should take action before problems escalate.

Miniatyyrimies istuu penkillä talon edessä.
People struggling to pay their bills because of coronavirus should talk to their landlord or bank, experts say. Image: Henrietta Hassinen / Yle

As in many other countries around the world, the coronavirus pandemic has left people in Finland facing unemployment and reduced income. Threatened by layoffs residents are increasingly concerned about being able to pay their rent or mortgage, according to the Finnish Tenants Association.

"Families don’t have enough of a financial buffer, so keeping their home is a really important thing," Anne Viita, executive director of the Finnish Tenants association, said.

The group said it has received many inquiries from people dealing with solvency issues. It advises individuals in a tight spot to act quickly and arrange payment plans with landlords.

"It’s a big blow if both of the family’s earners or the sole breadwinner doesn’t get paid," Viita said.

Many small businesses are dealing with the prospect of a sudden stop in their cash flows. The situation is especially precarious for entrepreneurs whose products have lost demand but who owe rent on both their commercial space and home, she explained.

Property firm SATO, which has some 26,000 rental units in Finland’s largest cities, has said it could consider setting up payment plans with tenants on a case-by-case basis.

Cash-strapped residents can apply for subsidies such as housing allowance and social assistance from benefits agency Kela, which has compiled an overview of benefits available during the coronavirus epidemic.

Relief for homeowners

Several retail banks in Finland have said they are working with customers to modify their loans.

Retail bank OP said its mortgage borrowers facing hardship could suspend payments for up to a year without any additional service fees.

”I believe this will significantly help many customers. Oftentimes mortgage payments take up to 30 or 40 percent of monthly income,” Harri Nummela, business director of OP retail bank, said.

During the 12-month deferral, customers would still be liable to pay the interest on their mortgage.

Nummela pointed out that customers should not rush out to modify their loans.

”There’s no hurry for customers to apply for a loan deferral just in case they need it. There’s time to do it if a real need arises,” he explained.

Nordea and Danske Bank have also announced they were cutting breaks on payments for up to six months.

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