Mortgage borrowers in Finland often have limited knowledge about the various repayment options available to them. This lack of information can lead to confusion and poor decision-making when it comes to their mortgages. To address this issue, Juha Beurling-Pomoell, the general secretary of the Consumers’ Association, has called on banks to improve their communication with consumers about loan options.
One popular form of loan in Finland is the annuity loan, which keeps the loan period constant but adjusts the repayment installments based on changes in interest rates. Understanding the differences between repayment methods is crucial for borrowers making informed decisions about their mortgages. In fact, 81% of new mortgages in Finland were annuity loans last year.
To help borrowers make informed decisions, Beurling-Pomoell emphasizes the importance of consumers educating themselves about loan options before entering negotiations with banks. However, not all consumers have the necessary knowledge or resources to do so. That’s why Beurling-Pomoell suggests that banks should proactively discuss different repayment options with their customers.
Sanna Atrilan from the Financial Supervisory Authority agrees and stresses that consumers should be informed about all available options and the risks associated with each. Atrilan also warns against assuming that a fixed installment loan will remain the same over time, especially as interest rates fluctuate. It’s essential for borrowers to have a clear understanding of their loan terms and potential risks before committing to a mortgage.
In conclusion, mortgage borrowers in Finland need more information about different repayment options and their associated risks. Banks should take a proactive approach to educate their customers and provide clear information about loans and their terms. Consumers should also take responsibility for educating themselves before making any decisions regarding their mortgages.
