WORKING GROUP: ERKKA MIKKONEN, BENJAMIN SUOMELA AND KAROLIINA JUNTENEN
MOLNDAL Here is a middle-class Swedish family: father Eric Malm and mother Signe Bremell and children Nike7, David5, and Esther1.5.
They are standing in front of their home in Mölndal, on the outskirts of Gothenburg.
The everyday life of a Swedish family with children is similar to the Finnish one in many ways, but there are also differences. Thanks to them, Swedes can do better than Finns even in tight times.
In this story, we look at Swedish mortgages, parental leave and hobby opportunities. They make finances in the western neighbor flexible and leave more money in hand every month compared to Finland.
In Swedish “perpetual” mortgages, the repayments are small
When the Malmi and Bremell family bought their detached house four years ago, the financial situation looked different.
In Sweden, mortgage debtors’ interest expenses have increased more than in Finland. In the Malmi family, the interest rate has risen from 1.3 percent at the time of borrowing to the current 4.7 percent.
However, the bigger difference compared to Finland is in the repayment of loans.
Swedes only have to repay the loan until half of the value of the apartment has been paid. Housing loans are also very long, and the mandatory repayments are smaller than in Finland.
Sweden’s almost permanent and monthly affordable loans leave money for the rest of your life – monthly expenses or investing. On the other hand, when mortgages are long and the interest rate is high, Swedes usually pay much more interest than Finns.
After Swedes have paid half of their home’s value, many pay only interest every month.
It is telling that Eric Malm doesn’t even understand the whole question about the length of the mortgage at first. The loan period does not have the same meaning in Sweden as it does here.
Sweden’s parental leave model is flexible to the needs of families
In Sweden, the state pays parental allowance a little more generously than in Finland.
However, the real advantage arises from the fact that Swedish employers pay compensation to the child’s parents on top of the parental allowance more often and for longer than Finns.
Even more significant, however, is the fact that Sweden’s parental leave model is much more flexible than Finland’s.
The parents of the Malmi and Bremell families both decided to withdraw the parental allowance paid by the state only five days a week for nine months. In this way, they wanted to prolong being at home with their girlfriend Ester.
Even after this, the family still had some parental leave to spare. They can use them, for example, for family holidays until Ester turns 12.
The family leave reform that came into force in Finland in August has taken a flexible model from Sweden. An arrangement like the Malmi and Bremell family would hardly be possible for us.
In Finland, it is basically impossible to separate parental allowance and parental leave, although special arrangements can be negotiated with the employer. Parental leave can be used in Finland until the child turns two years old.
A child can enjoy activities in Sweden for less
In Malmi and Bremell’s family, the two oldest children play football. In addition to this, Nike, the first child, attends dance lessons and David, the middle child, attends swimming school.
When you look at the expenses of a Swedish family, you’ll be struck by the simplicity of the hobby. Children’s regular hobbies only cost a good 40 euros per month.
Playing soccer in a club in particular can be significantly more expensive in Finland than in Sweden.
Nike dances at Gothenburg’s Kulturskolan.
Similar, publicly supported culture schools operate all over Sweden. In them, children and young people can enjoy playing, acting, visual arts and other cultural hobbies at an affordable price.
The Swedes also have to cut costs
In economic terms, Sweden has traditionally been stronger than Finland.
Last year, however, the western neighbor’s economy, measured in gross domestic product, declined according to the prediction a little more than Finland. The economy in Sweden is burdened by, among other things, the weak exchange rate of the krona, which keeps inflation high.
The increase in expenses has made the Swedish family calculate their money more precisely. However, they haven’t had to skimp on things that are perceived as important, such as the annual skiing holiday.
In this video, Signe Bremell tells how the family has managed to save under the pressure of inflation and rising interest rates.
Kela’s specialist Anneli Miettis and Nordea’s Kiinnitysluottobanki CEO Jussi Pajala have been interviewed for the story.
January 20, 2024 at 9:50 a.m. Corrected the price of the apartment in the fact box explaining the comparison of mortgages.