In Sunday’s program 15 minutes from Uutiset asked why Finland and Sweden have such different mortgage cultures and what advantages and disadvantages there are. The program was hosted by the Mayor of Helsinki, Juhana Vartiainen (KOK/SAML), former head of research at the Economic Institute in Sweden and former director general of the State Economic Research Center (VATT) in Finland.
Vartiainen: In sparsely populated Finland, households can lose their entire fortune
Juhana Vartiainen, who is currently mayor of Helsinki, also sees advantages in the more relaxed Swedish repayment culture.
– In Finland, it is very common for almost all of the household’s wealth to be tied up in their own home. This has led to very sad situations in the parts of Finland that are being depopulated. In the sparsely populated Finnish countryside, homes can become basically worthless and in such cases the household can lose its entire fortune, says Vartiainen.
Advisor at the Bank of Finland: Diversify, but not with borrowed money
Hanna Putkuri, advisor at the Bank of Finland, who participated in the program, also agrees with Vartiainen. The risks should be spread:
– Diversifying investments is good in itself, but not necessarily with borrowed money, i.e. at the expense of repayments.
In the video, national economist Juhana Vartiainen lists the distinctive features of Sweden’s and Finland’s mortgage cultures.