Finlands bank struggling to keep up with housing loan applications

FINNS are presently applying for new housing loans at an unusually high rate, reports Helsingin Sanomat.

Jani Eloranta, the head of personal banking at Nordea, on Wednesday told the newspaper that a surge in applications for housing loans has prompted the bank to take action to ensure the applications are processed without major delays.

A customer and staff member shook hands in a bank in Helsinki in March 2018. High interest in housing loans has forced banks to add personnel to ensure the applications are processed without major delays. (Martti Kainulainen – Lehtikuva)
A customer and staff member shook hands in a bank in Helsinki in March 2018. High interest in housing loans has forced banks to add personnel to ensure the applications are processed without major delays. (Martti Kainulainen – Lehtikuva)

Nordea, he told, has hired new mortgage advisors since last year and organised what it dubs super housing weekends, during which its advisors engage in mortgage negotiations with roughly a thousand applicants.

“Despite the measures, we are presently receiving so many applications that there have been some congestions and our appointments for the coming days are fully booked,” he added to the newspaper. “Housing loans have indeed been granted at a brisk pace from Nordea.”

The same message was sent by Tiina Mäkelä, the head of personal banking at OP Helsinki. Although the bank has witnessed a surge in housing loan applications in the first half of the year, it has been able to process the applications relatively smoothly and issue mortgage offers to the applicants by adding staff and increasing overtime.

“There have been occasional congestions in follow-up negotiations with customers,” she said.

Statistics from the Bank of Finland reveal that Finnish households took out 1.9 billion euros worth of housing loans in April, representing an increase of over 480 million euros from the previous year. Real estate agencies, meanwhile, have reported that the housing market is the busiest in recent history.

Eloranta viewed to Helsingin Sanomat that the phenomenon is attributable to at least a couple of factors: remote work has prompted people to re-examine their housing situation in a new light, interest rates have remained at an exceptionally low level, and house prices have not spiralled out of control despite the market activity.

“For many Finns, the financial situation has stayed stable and they’ve generally been able to cover their housing costs well,” he said.

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