Apartments | Did the interest rate cap offered by YIT make buyers rush to buy apartments?

FINLAND the largest construction company YIT told at the end of January, that it offers to pay the two percent interest rate cap on the home buyer's mortgage.

The offer is exceptional, but so are the times. Sales of new apartments are falling and YIT currently has almost 1,270 unsold apartments. There are more than 800 of these apartments in Finland.

The campaign offer has now been valid for just under two weeks, has it made people buy apartments, YIT's head of housing Antti Inkilä?

“The campaign is only at the beginning, but the demand has picked up and we have received a lot of positive feedback about the campaign.”

There is not much interest in the sale of apartments yet, but Inkilä doesn't expect that, because bank loan negotiations and other clarifications take their own time. Inkilä hopes that by the time the campaign ends in April, the apartments will have sold well.

Angel however, admits that the success of the campaign can be hampered by the fact that it is not necessarily clear to all homebuyers what kind of benefit the interest rate cap can be for them.

According to Inkilä, the biggest benefit of the interest rate cap is that the monthly housing costs of the home buyer will drop substantially compared to if he were to buy the home through a corporate loan.

“In other words, by taking the company loan portion of the apartment as your own personal loan, you get an interest cap on the entire loan amount.”

In this case, during the next five years, the loan's reference interest rate is a maximum of two percent and the loan margin.

With many the problem for mortgage debtors has been that when corporate loan interest rates have risen, the monthly costs of housing may have risen considerably. You can lock in the costs of living with YIT's interest rate ceiling for at least five years.

“If it's a flat-rate loan and the interest rate rises after five years, the loan period would only get longer, but the monthly cost would remain the same,” says Inkilä.

The interest rate cap therefore gives you the certainty that the cost of living will remain constant from the moment you buy the apartment.

From the home buyer's point of view, it would be clearer if the price of new apartments were lowered. YIT does not want to do that now.

“We have not considered a price reduction. We now have this campaign, and we really hope that people will dare to make purchase decisions through this benefit.”