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A 70 per cent housing company loan could change the new-build market more than the percentage suggests

This article has been translated from Finnish with the help of automated translation. The Finnish original is the authoritative version.

The maximum share of the housing company loan for new-build apartments rose from 60 per cent to 70 per cent at the start of July. The debt does not disappear, but it is distributed differently: a larger share of the financing is arranged at housing company level before the individual buyer even begins loan negotiations.

Illustration, produced with artificial intelligence

11 September 2026 · 2 min read

The maximum share of the housing company loan for new-build apartments rose from 60 per cent to 70 per cent of the flat's debt-free price at the start of July. At the same time, the regulation introduced more flexibility to loan terms and repayment holidays. [1]

The change is not merely technical. It can shift a larger share of a home's financing than before from the buyer's personal responsibility to the housing company's.

What matters is therefore not just the amount of debt, but also who takes it on and at what stage the credit decision is made.

If the debt-free price of a new-build apartment is EUR 300,000, a 60 per cent housing company loan means a housing company loan of EUR 180,000 and a purchase price of EUR 120,000 payable by the buyer.

With a 70 per cent housing company loan, the corresponding figures are EUR 210,000 and EUR 90,000.

The financing the buyer needs to arrange at the time of the transaction therefore falls by EUR 30,000 in the example calculation. However, the total financing need for the home does not change. The debt is simply distributed differently.

The debt does not disappear, but the credit decision changes

The bank still assesses the buyer's income, expenses, other debts, collateral and overall ability to pay. The housing company loan therefore does not bypass the personal credit decision. The bank must also take into account the buyer's share of the housing company loan's interest and repayments. [2]

Even so, a larger housing company loan can make it easier for a deal to go through. The purchase price the buyer needs to arrange personally falls from EUR 120,000 to EUR 90,000. This can be decisive in a situation where the buyer's ability to pay is sufficient for the overall cost of housing, but the size of a personal loan would otherwise become an obstacle.

The debtor on the housing company loan is the housing company. In construction-phase financing, the bank assesses the company, the project, the collateral and the prospects for sales. By the time the apartment is later sold, the housing company loan already exists.

The 70 per cent limit is therefore not just a change concerning leverage. It can also affect the availability of financing.

The effect can extend through the entire new-build chain as follows:

larger housing company loan → smaller purchase price to arrange personally → larger pool of potential buyers → better pre-sales → easier project financing → more construction starts.

This chain does not, however, materialise automatically. It is affected by factors including the level of interest rates, housing prices, buyers' ability to pay and banks' lending policies.

A larger housing company loan also increases risk

A housing company loan can make it easier to finance an individual apartment, but at the same time it concentrates more debt at the level of the housing company.

A shareholder must pay their capital charge. If payment difficulties become widespread, the housing company's ability to service its own debt can weaken. A housing company has statutory means of securing its receivables, but ultimately the company must be able to repay its loan to the bank. [3]

A large housing company loan therefore makes an individual shareholder's ability to pay partly a matter for the other shareholders as well. The regulatory change can improve the availability of financing at the individual level, but at the same time it increases risk at the level of the housing company.

For an investor, a housing company loan is ready-made leverage

For a EUR 300,000 apartment, a 70 per cent housing company loan means a debt share of EUR 210,000 and a purchase price of EUR 90,000. The investor gains access to substantial leverage without a personal loan of equivalent size at the time of the transaction.

Leverage, however, works in both directions. Returns must be assessed against interest, repayments, the capital charge and other costs. A possible repayment holiday can improve cash flow in the initial phase, but it does not remove the loan principal; it merely postpones the repayments to a later date.

That is why calculations must also be made for the period after the repayment holiday and at a higher interest rate.

Funds operate from a different starting point

The financing structures of professionally managed housing and real estate funds vary. Their leverage can be limited by legislation, the fund's rules, commitments given to investors, and lenders' loan terms and covenants. Loan-to-value ratios at real estate funds have not fallen in recent years but risen: according to the Finnish Financial Supervisory Authority (FIN-FSA) and the Bank of Finland, the share of debt capital at open-ended real estate funds grew from the end of 2022 to the end of 2024, by around 9 percentage points at funds investing in housing. Loan-to-value ratios nonetheless remain clearly below the limits set by the Real Estate Funds Act. [5] However, funds' own lending limits, commitments given to investors and lenders' covenants may be reached before the maximum share of the housing company loan becomes relevant. That is why a rise in a housing company's loan-to-value ratio does not necessarily help funds launch new projects. [4]

Construction companies and private investment companies that operate outside financial sector regulation can, by contrast, benefit from the change, because they can use a smaller equity contribution than before as a competitive advantage in selling homes. This is an attractive selling point both for property investors and for people buying a home for their own use.

The effects will show with a delay

The effects of the regulatory change cannot yet be inferred from short-term statistics, because July was only the first month the new decree was in force. [6] Planning, financing, pre-sales, construction and the sale of homes for a new project form a long chain, so the effects of the legislative change will only be seen over a longer time horizon.

A 70 per cent housing company loan does not make a home cheaper, nor does it turn a total financing need of EUR 300,000 into EUR 90,000. It changes the structure of the financing.

An even larger share of the debt than before can be arranged at housing company level before the individual buyer's personal loan negotiation. The significance of the change therefore lies not only in the amount of debt, but in who makes the credit decision, about whom it is made, and at what stage of the housing project it is made.

If the change increases the number of households able to buy, it can help open up the entire new-build chain. Because the market situation for new-build production is at a record low and housing starts have fallen to their lowest level in nearly 60 years of statistical history, the change is welcome. [7]

Sources

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