New rules for housing company loans – investors' cash reserves put to the test
Restrictions on housing company loans have been widely discussed among investors. Starting in 2025, housing companies' debt may not exceed 60% of the debt-free sale price of apartments, and the loan repayment period may not exceed 30 years (Taloustaito.fi). In addition, there will be limited repayment-free periods immediately after completion to prevent interest rate risks from increasing too much (Finanssivalvonta.fi). The aim is to curb household indebtedness and increase transparency in the structure of housing company loans – but at the same time, this regulation significantly changes the way investors finance their apartments. The new legislation will have a direct impact on the cash flow of investment properties, the need for a financial buffer, and risk management.
From an investor's perspective, these changes make it necessary to assess the adequacy of one's financial flexibility more carefully than before. As repayment holidays become shorter and interest rates remain high, the monthly financial burden of investment properties will increase rapidly. This means that cash flow may decrease even if rental income remains the same. Investors should therefore consider whether it is better to purchase apartments with lower corporate loans or to increase their own capital investment to ensure better return stability. A large housing company loan can increase leverage and returns during an economic upturn, but at the same time it increases risk if interest rates rise or the rental housing market slows down. When it comes to investment apartments, it is also worth preparing for the possibility that loan terms will no longer offer the same flexibility as before.
On the other hand, the new rules may bring welcome stability to the market. When the maximum amount of housing company loans is limited, the prices of new properties "inflated" by company loans may level off and price bubbles may shrink. This also improves transparency: investors can compare properties more easily and make more informed purchasing decisions. The restrictions may even increase the buyer's bargaining power, as developers will have to price properties more realistically. From an investor's perspective, this is an opportunity to focus on long-term and responsible real estate investment, with an emphasis on sustainable cash flow rather than just short-term appreciation. When considering loan arrangements for an investment property, ask yourself: how much are you willing to pay for peace of mind and predictability?
The impact of regulation can be illustrated with a simple example. Consider a €100,000 apartment, of which €60,000 (60%) is a housing company loan. If the interest rate on the loan is 2.147% (e.g., 12-month Euribor on August 1, 2025, Bank of Finland) and the loan term is 30 years, the loan repayment and interest included in the monthly payment could be around €300. Previously, an 80% housing loan and a longer repayment-free period would have reduced monthly expenses, but at the same time the risk would have been greater. Now, cash flow may decrease in the short term, but the overall risk of the investment apartment is reduced when the housing company's financial structure is more stable. At the same time, a green loan can be applied for energy efficiency renovations, which reduces the company loan and helps to stay within the new limits (Asuntosalkunrakentaja.fi).
Ultimately, the new rules for housing company loans may make real estate investment more sustainable and long-term. They reward investors who calculate returns realistically and build cash flow on moderate assumptions. Investment property is no longer an easy route to quick profits, but above all a way to build stable, responsible, and predictable wealth. The investor of the future is someone who understands the real connection between housing loans, cash flow, and financing costs—and knows how to make decisions with the long term in mind.
Sources
- Financial skills: How much can you borrow? – Maximum levels for housing company loans and loan term restrictions.
- Financial Supervisory Authority: Regulation of housing company loans – Objectives for curbing indebtedness.
- Bank of Finland: Euribor rates – 12-month Euribor.
- Landlords Association: Restrictions and effects of housing company loans.
- Portfolio builder: Corporate loans and financing contributions in real estate investment.