Finns think others have too large mortgages
(Thomson Reuters ONE) -
A survey commissioned by Nordea indicates that 7 per cent of Finns think that
they have too large mortgages. However, nearly 70 per cent of the respondents
who have a mortgage on their home thought that many other households have taken
out too large loans. Eight out of ten are satisfied with their living and
housing loan situation.
One in three respondents spends 20 per cent or less of their monthly net income
on mortgage payments. Young people generally spend more of their monthly net
income on repaying their housing loans than the older age groups. One in six
respondents aged between 25 and 34 says that they spend over 40 per cent of the
household's monthly net income on mortgage payments.
The survey also shows that Finns are uncertain about how much higher monthly
mortgage payments their household could cope with: 37 per cent of the
respondents chose the alternative "Cannot say".
- This is alarming given that at present interest rates are very low. These
households in particular should absolutely be prepared for a rise in rates.
Especially if they have much left of the loan to repay and they have not put
aside much savings and have less flexibility overall, says Anu Numminen,
Nordea's Private Economist.
One of the questions of the survey dealt with the sense of safety in relation to
the size of the housing loan. Eight out of ten respondents said that they feel
safe when the mortgage represents 50 per cent of the market value of the home or
less. Young people are generally more comfortable than older people even if the
mortgage was higher than this.
Interest rates expected to rise
Six out of ten respondents believe that interest rates will rise in 2010, and
40 per cent of them also expect the prices of flats and houses to rise in 2010.
Nearly all the respondents are amortising their housing loans and few households
are paying interest only.
- Paying interest only is, perhaps a bit surprisingly, more common in the older
age groups, but the majority of them, too, are repaying their loan regularly.
This would seem to indicate that Finns still have a relatively sound attitude,
says Numminen.
More than one-third of the respondents could think of using their home as
security and increase their mortgage in order to renovate or rebuild their home,
but only one in five would do so to buy a car or a boat. Particularly families
living in small cities would to a higher degree consider increasing their loan
to renovate or rebuild the home. Only a few respondents out of one hundred would
take out a new loan for daily spending, a holiday trip or home electronics with
their home as security.
Nordea examined the situations of Finns and their attitudes towards mortgages
and housing loans. The target group of the survey was homeowners in the age
group of 25-65 who have taken out a loan for their flat or house. In Finland the
survey included 994 interviews. A corresponding survey was conducted in Sweden,
Norway and Denmark between 19 February and 1 March 2010. It was also
commissioned by Nordea and carried out by Synovate.
For further information:
Anu Numminen, Private Economist, +358 9 165 88218, +358 50 597 0447
[HUG#1399543]
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Datum: 31.03.2010 - 02:31 Uhr
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