Clients who have taken out home loans from OP Financial Group have made significantly more extra repayments on their home loans, said OP in a press release on Friday.
About 50 per cent more repayments were made in August in comparison to the previous year. However, fewer applications for repayment holidays were submitted.
The amount of extra repayments has steadily increased during the past year.
“What this tells us is that while interest rates have rapidly increased, many households have still had enough savings to making extra repayments. Therefore, the finances of our home loan customers remain resilient,” said Satu Nurmi, Senior Vice-President, Mortgages and Real Estate Business of OP Financial Group.
On average, customers of OP Financial Group made extra repayments of 3,000 euros in August.
The housing market has had an exceptional 12 months, during which there has been a significant decrease in the amount of housing sales in comparison to previous years and home prices have also fallen.
“We always recommend that our customers contact the bank as soon as possible when facing any financial challenges. In fact, our customer service is now receiving more questions regarding home loans and interest rates, and some customers are making changes to their home loans on the basis of the discussions,” said Nurmi.
In August, OP Financial Group, however, received 10 per cent fewer applications for loan modifications compared to the previous year. For example, in 2019, before the start of the coronavirus pandemic, all variants of loan modifications were made to the home loans of OP Financial Group’s customers in higher numbers than seen today.
“The changing market conditions of our home loan portfolio can be seen most clearly in an increasing number of customers wanting to change the reference interest rate of their home loan. When interest rates were at zero, almost all of our home loans were tied to the 12-month Euribor. Now, 15 per cent of OP Financial Group’s home loan portfolio is tied to shorter-term interest rates. We will see how this plays out in the future,” Nurmi said.