Long mortgages gain ground: quarter of OP Uusimaa applicants choose 35‑year‑plus loans

About a quarter of OP Uusimaa mortgage customers are opting for terms longer than 35 years, YLE reported.

Tampere buyer Joonas Hiltunen took a 35-year mortgage on his city-centre apartment in 2021. He paid about €45,000 down on the roughly €320,000 flat and currently carries about €261,000 in mortgage debt, paying roughly €1,000 a month in principal and interest. He stretched the repayment schedule to free around €250 a month for regular stock investments. He says he would prioritise paying down the loan if interest rates rose sharply.

The maximum mortgage term was extended to 40 years in early June, a change that lowers monthly payments but can substantially increase lifetime interest. At a 3.5% rate, extending a €200,000 loan to 40 years adds nearly €50,000 in interest in one bank example.

Lenders report growing demand: applicants who favour long terms averaged 36 years and made up one in four June applications, OP Uusimaa says, while Nordea predicts roughly a third of new loans could exceed 30 years by autumn. Forty-year loans have so far been rare, Danske Bank says.

Finland's central bank still puts the average mortgage length at about 23 years, although it has been rising since last year. The trend follows the government's May decision to ease housing company loan rules, a change critics warned could push some housing-related costs higher in Tampere.