Opinion of the European Central Bank of 6 October 2025 on national macroprudential measures related to mortgage lending (CON/2025/31)
Date: 2025-10-06
Institutions: European Central Bank
Subjects: financial stability

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 6 October 2025  

on national macroprudential measures related to mortgage lending 

(CON/2025/31) 

Introduction and legal basis 

On  27  August  2025  the  European  Central  Bank  (ECB)  received  a  request  from  the  Finnish  Ministry  of 

Finance  for  an  opinion  on  a  draft  law  amending  the  law  on  credit  institutions  and  certain  related  laws 

(hereinafter the ‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning of the European Union and Article 2(1), sixth indent, of Council Decision 98/415/EC1, as the 

draft law relates to rules applicable to financial institutions insofar as they materially influence the stability 

of  financial  institutions  and  markets.  In  accordance  with  Article 17.5,  first  sentence,  of  the  Rules  of 

Procedure of the European Central Bank, the Governing Council has adopted this opinion. 

1. 

Purpose of the draft law 

1.1  The  main  purpose  of  the  draft  law  is  to  amend  provisions  on  certain  macroprudential  measures, 

namely  borrower-based  measures  related  to  mortgage  lending,  in  order  to  promote  saving  and 

investing, support housing trade and construction, make it easier to change housing, and make the 

regulation of financing for housing more flexible. 

1.2  Currently  loan-to-value  (LTV)  requirements  applicable  to  mortgage  loans  granted  by  credit 

institutions  and  certain  other  creditors  providing  consumer  loans  limit  the  maximum  amount  of  a 

mortgage loan relative to the available collateral to 90 % (or 95 % in the case of first-time buyers) of 

the fair value of the collateral. The draft law gives Finanssivalvonta (FIN-FSA, Financial Supervisory 

Authority), as the national macroprudential authority, the power to increase the LTV limit to 95 % 2. 

The increase of the LTV ratio would be possible for the purpose of limiting an exceptional downturn 

of the housing market but only if it is not assessed to result in a significant increase in the risks related 

to financial stability. 

1.3 

In addition, the draft law increases the maximum loan period applicable to residential mortgages from 

30 to 35 years. In each calendar quarter 10 % of the total amount of a lender’s loans would be allowed 

to exceed the maximum limit3. 

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2  

3  

Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42, ELI: http://data.europa.eu/eli/dec/1998/415/oj ). 
Draft Chapter 15, Section 11(3) of the Law on credit institutions (610/2014) and draft Section 14(3) of the Law on the 
registration of certain creditors and credit intermediaries (186/2023). 

Draft Chapter 7a, Section 14a of the Law on consumer protection (38/1978). 

 
 
 
 
 
 
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1.4  Currently the maximum amount of a loan granted to a housing company for the construction of new 

residential  properties  is  limited  to  60 %  of  the  debt-free  sales  price  of  the  shares  of  the  housing 

company offered for sale. The draft law would remove this limit from the law and replace it with a 

mechanism whereby the limit would be set between 60 to 70 % in a government decree4. 

1.5  Similarly, the current maximum 12-month limit for the amortisation-free period or a period of lower 

than regular amortisation of a housing company loan would be removed from the law and replaced 

with a mechanism whereby the limit would be set between 12 to 24 months in a government decree5.  

1.6  Finally, the 30-year maximum loan period for loans to housing companies laid down in the law would 

be  replaced  with  a  mechanism  whereby  the  limit  would  be  set  between  30  to  35  years  in  a 

government decree. In each calendar quarter 10 % of the total amount of a lender’s loans would be 

allowed to exceed the maximum limit 6. 

1.7  According  to  the  explanatory  memorandum  accompanying  the  draft  law,  adopting  the  measures 

related to housing company loans by means of a government decree allows the limits to be adjusted 

more flexibly in accordance with the economic cycle compared to setting the limits in legislation7. 

2. 

General observations  

2.1 

In its previous opinions on macroprudential oversight8 the ECB expressed support for the design of 

effective macroprudential policy frameworks within Member States, in line with the guiding principles 

set  out  in  Recommendation  ESRB/2011/3  of  the  European  Systemic  Risk  Board9.  It  should  be 

highlighted  that  Regulation  (EU)  No  1092/2010  of  the  European  Parliament  and  of  the  Council10 

indicates that national central banks should have a leading role in macroprudential oversight because 

of their expertise and their existing responsibilities in the area of financial stability. This principle is 

also  upheld  by  the  European  Systemic  Risk  Board  (ESRB) 11.  In  addition,  Recommendation 

ESRB/2011/3 recommends that, in the pursuit of its objective, the macroprudential authority is, as a 

minimum, operationally independent, in particular from political bodies 12. The ECB notes that under 

Finnish  law  the  power  to  adopt  macroprudential  measures  is  currently  assigned  to  the  FIN-FSA 

Board. The Board is composed of a minimum of five and a maximum of six members, three of whom 

are appointed on the basis of proposals by Suomen Pankki, the Ministry of Finance and the Ministry 

4  

5  

6  

7  

8  

9  

10  

11  

12  

Draft Chapter 15, Section 11a(1) of the Law on credit institutions (610/2014) and draft Section 15(1) of the Law on the 
registration of certain creditors and credit intermediaries (186/2023). 
Draft Chapter 15, Section 11a(2) of the Law on credit institutions (610/2014) and draft Section 15(2) of the Law on the 
registration of certain creditors and credit intermediaries (186/2023). 
Draft Chapter 15, Section 11a(3) of the Law on credit institutions (610/2014) and draft Section 15(3) of the Law on the 
registration of certain creditors and credit intermediaries (186/2023). 
Chapter 8, page 29 of the draft government bill on the law amending the law on credit institutions and certain related 
laws. 

See, for example, paragraph 2.1 of Opinion CON/2013/82 and paragraph 2.1 of Opinion CON/2022/8. All ECB opinions 
are published on EUR-Lex. 

Recommendation ESRB/2011/3 of the European Systemic Risk Board of 22 December 2011 on the macro-prudential 
mandate of national authorities (OJ C 41, 14.2.2012, p. 1). See also paragraph 4.2 of Opinion CON/2013/82. 

establishing 

Recital 24 of Regulation (EU) No 1092/2010 on European Union macro-prudential oversight of the financial system 
ELI: 
Board 
and 
http://data.europa.eu/eli/reg/2010/1092/oj). 
See  recital  7  and  Section  1,  Recommendation  B,  of  Recommendation  ESRB/2011/3.  See  also  paragraph  2.7  of 
Opinion CON/2020/1.  

15.12.2010, 

European 

Systemic 

331, 

(OJ 

1, 

p. 

L 

a 

See Section 1, Recommendation E, of Recommendation ESRB/2011/3. 

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of Social Affairs and Health, respectively. The Board members must be conversant with the activities 

of the financial markets. Decisions are taken by simple majority and the Chair of the Board has a 

casting vote in decisions on the adoption of macroprudential measures.  

2.2  Based  on  the  draft  law,  the  new  macroprudential  measures  related  to  loans  granted  to  housing 

companies would be adopted by a decree issued by the government 13 instead of by decisions taken 

by the FIN-FSA Board. According to the explanatory memorandum accompanying the draft law the 

measures  need  to  be  adopted  by  a  decree  because  the  limits  on  the  loans  granted  to  housing 

companies are far-reaching by their social nature and important in principle 14. The ECB notes that 

adopting the  macroprudential  measures related to housing company loans through a government 

decree risks conflict with the recommendation set out in Recommendation ESRB/2011/3 that, in the 

pursuit of its objective, the macroprudential authority is as a minimum operationally independent, in 

particular  from  political  bodies15.  Furthermore,  Recommendation  ESRB/2011/3  recommends 

Member States to ensure that the macroprudential authority has control over appropriate instruments 

for  achieving  its  objectives.  Where  necessary,  clear  and  expeditious  procedures  should  be 

established for assigning instruments to the macroprudential authority 16. However, the ECB refrains 

from  making  any further  observations regarding the  possible  institutional implications for the FIN-

FSA,  as  the  national  macroprudential  authority,  arising  out  of  the  requirement  that  the  new 

macroprudential measures related to loans granted to housing companies would be adopted by a 

decree  issued  by  the  government  instead  of  by  decisions  taken  by  the  FIN-FSA  Board17. 

Furthermore, it is for the Finnish authorities to consider the constitutional feasibility of granting the 

FIN-FSA Board the power to adopt these measures, rather than adopting them through a government 

decree. 

2.3  The ECB observes that, from a financial stability perspective, an extension of the maximum maturity 

for both mortgages and housing company loans, as well as the possibility to increase the LTV limit 

in respect to all homebuyers, could lead to an increase in the demand for larger loans. This, in turn, 

could contribute to increased levels of indebtedness among households and housing companies. In 

the  specific  case  of  Finland,  this  warrants  close  monitoring  as  household  indebtedness  remains 

elevated both from a historical perspective and compared with other Member States, as highlighted 

by Suomen Pankki in its recent financial stability assessment18. With regard to any potential change 

to the LTV limit, the ECB has already noted in a previous opinion that the definition of collateral in 

Finland differs from the approach recommended in Recommendation ESRB/2019/8 of the European 

13  

14  

15  

16  
17  

18  

Draft  Chapter  15,  Section  11a  of  the  Law  on  credit  institutions  (610/2014)  and  draft  Section  15  of  the  Law  on  the 
registration of certain creditors and credit intermediaries (186/2023). 
Chapter 8, page 29 of the draft government bill on the law amending the law on credit institutions and certain related 
laws. 
See  Section  1,  Recommendation  E,  of  Recommendation  ESRB/2011/3.  See  also  paragraphs  3.1.3  and  3.1.4  of 
Opinion CON/2024/11. 
See Section 1, Recommendation C, of Recommendation ESRB/2011/3. 

See  also  paragraph  2.2  of  Opinion  CON/2016/18,  paragraph  2.3  of  Opinion  CON/2017/14  and  paragraph  2.3  of 
Opinion CON/2017/29. 
See  Suomen  Pankki,  ‘Global  upheaval –  Financial  stability at  risk  from power  politics’, 19 June 2025,  available  on 
Suomen Pankki’s website at www.bofbulletin.fi . 

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Systemic Risk Board19,  20. Specifically, the Finnish definition allows for the inclusion of assets other 

than  real  estate  as  eligible  collateral.  Furthermore,  the  ECB  observes  that,  based  on  available 

information  regarding  similar  borrower-based  measures  implemented  in  other  Member  States,  a 

relaxation of the limits for the LTV ratio and maximum loans’ maturity would position Finland among 

the  countries  with  the  higher  limits  regarding  this  type  of  macroprudential  measure.  Finally,  with 

regard to the proposal to entrust the government with the power to amend certain macroprudential 

measures related to loans  granted to housing companies via  decree depending on the economic 

cycle, the ECB recalls its recent statement calling on national macroprudential authorities to maintain 

the  resilience  of  the  banking  sector.  In  this  respect,  the  ECB  has  highlighted  the  importance  of 

maintaining existing borrower-based measures to preserve sound lending standards via their role as 

structural backstops, where this is feasible in national legislation21. 

2.4  Finally, the ECB also notes that other factors, such as the renovation costs associated with ensuring 

that  older  dwellings  comply  with  the  relevant  energy  efficiency  regulations,  may  increase  the 

depreciation  in  the  value  of  such  properties.  These  considerations  could  also  be  relevant  when 

macroprudential authorities evaluate the appropriateness of relaxing borrower-based measures. 

This opinion will be published on EUR-Lex. 

Done at Frankfurt am Main, 6 October 2025. 

[signed] 

The President of the ECB 

Christine LAGARDE 

19  

20  
21  

Recommendation ESRB/2019/8 of the European Systemic Risk Board of 27 June 2019 on medium-term vulnerabilities 
in the residential real estate sector in Finland (OJ C 366, 30.10.2019, p. 29). 

See paragraph 3.2 of Opinion CON/2022/8. 

See ECB, Governing Council statement on macroprudential policies, 7 July 2025, available on the ECB’s website at 
www.ecb.europa.eu . 

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