Mortgage holders in Finland are starting to feel the sting of the international financial crisis. On Tuesday the one-year Euribor interest rate again rose to its highest level since Finland joined the euro zone. The 12 month Euribor rate, which is generally used as the benchmark for housing loans, edged up to 5.44 percent on Monday and 5.45 percent on Tuesday. This is the highest since the beginning of 1999, when Finnish banks began using the euro to calculate rates. Most Finnish home loans are tied to this reference rate. "Interest rates have been rising since the first signs of the financial crisis last August. Inflation woes also caused the European Central Bank to hike up interest rates this summer," says Roger Wessman, Chief Analyst at Nordea. Borrowers Brace for Further Hikes
Homeowners worry that the Euribor will continue to climb in the near future.
"It's likely that rates are likely to continue to surge in the short-term, especially towards the change of the year," says Wessman.
Borrowers are now also facing higher mortgage payments because banks are increasing marginal interest rates in the face of global financial turbulence.
Five years ago the lending landscape looked entirely different. In the summer of 2003 the Euribor hit its low, dipping slightly below two percent.
