Macroprudential decision: Housing loan cap to be increased to 95% for all borrowers – Capital buffer requirements for banks to remain unchanged
Press release 30 June 2026
Macroprudential decision: Housing loan cap to be increased to 95% for all borrowers – Capital buffer requirements for banks to remain unchanged
The Board of the Financial Supervisory Authority (FIN-FSA) is to raise the cap for housing loans other than first-home loans to 95%. This measure is designed to limit the downturn in the housing market. For first-home loans, the cap is to remain at the maximum level of 95%. Additionally, the Board is to maintain the countercyclical capital buffer (CCyB) requirement for banks at 0.0% and keep the additional buffer requirements for other systemically important institutions (O-SIIs) unchanged.
The earlier positive momentum in the global economy has been adversely affected by the Middle East conflict and geopolitical challenges. Higher energy and raw material prices and increased uncertainty resulting from the conflict have weakened the growth outlook and added to inflationary pressures, thereby affecting interest rate expectations. In its June projections, the European Central Bank (ECB) expects euro-area growth for 2026 to be 0.7 percentage points lower than it was in 2025. i.e. 0.8%.
Growth in the Finnish economy began to pick up towards the end of 2025, but the Middle East conflict has weakened the growth outlook. According to the Bank of Finland’s June 2026 economic forecast, the Finnish economy will grow by 0.7% in 2026, 1.2% in 2027 and 1.4% in 2028. The FIN-FSA Board is monitoring developments in the Middle East conflict and the associated risks, as well as their impact on the stability of the Finnish financial system.
Housing loan cap for borrowers other than first-home buyers to be increased to 95%
The legislative amendments that entered into force at the beginning of June 2026 allow the FIN-FSA to increase, by up to 5 percentage points, the maximum loan-to-collateral (LTC) ratio for housing loans other than first-home loans, for the purpose of limiting a downturn in the housing market. Based on the available statistical data, the FIN-FSA’s view is that the Finnish housing market is still in a downturn. The FIN-FSA is to raise the cap for housing loans other than first-home loans to 95%. The cap applicable to first-home loans will remain at 95%.
“The weakness of the housing market in recent years and the geopolitical uncertainty and subdued economic outlook all support a temporary easing of the maximum LTC ratio. On a quarterly basis, we will assess the conditions for continuing with this easing,” says Chair of the FIN-FSA Board Marja Nykänen.
Countercyclical capital buffer requirement for banks maintained at 0.0%
Risk indicators show that risks pointing to an overheating of the financial cycle are still small. The primary risk indicator – the deviation of the private sector credit-to-gross domestic product (GDP) ratio from its long-term trend, or the credit-to-GDP gap – fell in the first quarter of 2026 to the lowest level so far in the cycle.
Growth in the corporate loan stock has been brisk in the early part of the year, but growth in the household loan stock has remained more subdued. Uncertainty in the financial markets has increased as a result of the Middle East conflict. Hence there are justifiable grounds for maintaining the CCyB requirement at 0.0%.
Additional capital buffer requirements for other systemically important institutions unchanged
The FIN-FSA has reviewed, in the manner required by law, the O-SII buffer requirements set on 26 June 2025. There have been no material changes in the systemic importance of Finnish O-SIIs over the year, and the O-SII buffer rates will therefore remain unchanged:
- Nordea Bank Abp 2.5%
- OP Pohjola 1.5%
- Municipality Finance Plc 0.5%
The Board of the Financial Supervisory Authority assesses on a quarterly basis the short and long-term risks to the stability of Finland’s financial system. If necessary, the Board may tighten or relax its macroprudential instruments for promoting stability. The Board decides on a quarterly basis the level of the countercyclical capital buffer (CCyB) requirement and the level of the maximum loan-to-collateral (LTC) ratio for housing loans. The levels of additional capital requirements for nationally systemically important institutions (O-SII buffers) are reviewed at least annually and the level of the systemic risk buffer (SyRB) at least every second year.
For further information, please contact:
Marja Nykänen, Chair of the Board of the Financial Supervisory Authority, tel. +358 9 183 2007
View this link to access the appendices listed below
- The FIN-FSA Board’s decision on the application of macroprudential instruments (PDF)
- Proposal of the Director General of the FIN-FSA, circulated for comment, on the application of macroprudential instruments (PDF, in Finnish)
- Opinions concerning the Director General’s proposal on the application of macroprudential instruments (PDF, in Finnish)
- Bank of Finland
- Ministry of Finance
- Proposal of the Director General of the FIN-FSA on the additional capital requirements for other systemically important institutions (PDF, in Finnish)
- Decision of the Board of the Financial Supervisory Authority on the capital buffer requirement for other systemically important institutions (PDF)
- Opinions concerning the Director General’s proposal on the additional capital requirements for other systemically important institutions (PDF, in Finnish)
- Bank of Finland
- Ministry of Finance
- Ministry of Social Affairs and Health
- Principles for identifying other systemically important institutions (O-SIIs) and setting O-SII buffer requirements (PDF)
- Macroprudential report 1/2026 (in Finnish)
Contacts
- Media phone service number, +358 9 183 5030