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Study: Mortgage-holding under 30s are responsible borrowers

A new National Consumer Research Study finds that young adults with home loans are better at managing their finances than those without mortgages.

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Image: Ismo Pekkarinen / AOP

In Finland's larger cities, taking out a mortgage often marks the start of a long relationship with the bank.

According to new research by the National Consumer Research Centre, young adults under the age of 30 who embark on the mortgage route are responsible borrowers.

Anna-Riitta Lehtinen of the National Consumer Research Centre says that those with a home loan often exercise better control over spending, and carefully plan their purchases whereas young adults who take out a consumer credit loan are more impulsive spenders.

Researchers surprised by findings

Researchers were surprised by how financially responsible young people with mortgages proved to be.

One of the young people interviewed by Yle, Johannes Koski of Helsinki said that "having a mortgage means that my wife and I use an Excel spreadsheet to keep our finances in check."

But despite these findings, researchers are not encouraging young people to get a mortgage.

"It's such a big investment that everyone has to carefully consider whether it's the right option for them," says Lehtinen.

Drop in first-time home buyers

During the past ten years the number of first-time home buyers has dropped by more than 40 percent, as more young people are opting to rent rather than buy. 

Henna Mikkonen, an economist with Danske Bank, says this is not surprising: "There's been a long and severe recession in Finland, unemployment and youth unemployment have risen, and there's a general air of uncertainty."