Many Finnish families could soon need to take a break from their mortgage repayments. Lay-off talks have so far affected some 80,090 people, according to figures from the blue collar trade union confederation SAK.
Despite the rise in workplace insecurity, banks have not noticed a rise in customers feeling the pinch.
"Requests for a suspension in repayments haven’t increased especially", said Riikka Laine-Tolonen, Nordea's head of Household and Marketing, who also pointed out the time lag between lay-off talks and any effect on family finances.
Laine-Tolonen recommends that debtors contact their lender in plenty of time if their ability to make repayments is threatened by unemployment.
Negotiated solutions best
"Generally we negotiate a repayment suspension or a longer loan period, so that the instalments fall to a manageable level", advised Laine-Tolonen. "At most we can lengthen the loan repayment period by two years."
If those measures are not enough, the bank checks to see if customers have the possibility to move to a smaller home. Selling the property and moving to a rental is a last resort.
"Interest rates are now so exceptionally low that owning your home is anyway a better solution than a rental apartment", said Laine-Tolonen.
Erik Siren, head of the Finnish Financial Ombudsman (Finnish name Fine) says that queries over suspending repayment are much more common now than last year, in part because more customers are in financial difficulties.
Siren added that banks can not unilaterally increase the margin paid on mortgages if they agree a repayment suspension. He recommended that customers take their paperwork to the bank if they need to agree a repayment suspension.