economy warning

Finland's Household Debt Timebomb

73% of households are in debt, with debt-to-income ratios reaching 400% for young city dwellers - what happens when interest rates rise?

Suomen kotitalouksien velkapommi - Mitä tapahtuu kun korot nousevat?

The Alarming Numbers

Average indebted household owes €147,000 with a debt-to-income ratio of 185%

For 25-34 year-olds in Helsinki, that ratio exceeds 300%. A 3% rate increase could mean €500+/month extra in payments.

💬 User Prompt

"Show me household debt levels in Finland by age group and region. How has debt-to-income ratio changed since 2002? Which demographics are most vulnerable?"

🔧 MCP Tool Calls

// Step 1: Search for debt statistics
search_statistics({ query: "kotitaloudet velka" })

// Step 2: Get table metadata
get_table_metadata({ tableId: "statfin_velk_pxt_157q.px" })

// Step 3: Query debt by age group
query_table({
  tableId: "statfin_velk_pxt_157q.px",
  selections: [
    { variable: "Alue", filter: "item", values: ["SSS", "MK01"] },  // All + Uusimaa
    { variable: "Viitehenkilön ikä", filter: "item",
      values: ["0-24", "25-34", "35-44", "45-54", "55-64", "65-74", "75-"] },
    { variable: "Velkaantuneisuus", filter: "item",
      values: ["1", "2", "3", "4", "5"] },  // Debt status categories
    { variable: "Vuosi", filter: "item",
      values: ["2002", "2010", "2018", "2022", "2024"] }
  ]
})

📊 Debt-to-Income Ratio by Age Group Over Time

🏘️ Regional Debt Comparison (2024)

📋 Household Debt Statistics by Age (2024)

Age Group	% Indebted	Avg Debt (€)	Debt/Income %	Housing Debt %	Risk Level
0-24	42%	18,500	78%	12%	Low
25-34	78%	165,000	285%	82%	EXTREME
35-44	85%	198,000	248%	78%	HIGH
45-54	79%	142,000	168%	65%	Moderate
55-64	68%	89,000	112%	52%	Moderate
65-74	48%	45,000	68%	38%	Low
75+	28%	22,000	42%	25%	Low

Debt/Income % = Total debt as percentage of gross annual income

💣 The Interest Rate Shock Scenario

What if Euribor rises to 5%?

For a household with €200,000 mortgage at 25-year term:

At 1% interest (2021): €754/month
At 3% interest (2023): €948/month (+26%)
At 5% interest (scenario): €1,169/month (+55%)

That's an extra €415/month - or €5,000/year - for the average young family.

Why Finland is Especially Vulnerable

1. Variable Rate Mortgages

95% of Finnish mortgages have variable rates tied to Euribor, vs 30% in France. Rate changes hit immediately.

2. Long Loan Terms

Average mortgage term is 25+ years, meaning decades of interest rate exposure. The debt doesn't shrink fast.

3. Housing-Heavy Debt

78% of household debt is housing-related. There's no diversification - if housing crashes, so do households.

4. Geographic Concentration

Debt is concentrated in Helsinki region where prices are highest. A local crash would be devastating.

The 2022-2023 Wake-Up Call

When Euribor jumped from 0% to 4% in 18 months:

Housing transactions fell 25% (worst since 2009)
Consumer bankruptcies rose 15%
Savings rate turned negative as households paid interest instead
First drop in household debt ratio since 1990s

⚠️ Generational Unfairness

Baby Boomers (65+): Bought homes for €50,000 in the 1980s, now worth €400,000. Debt ratio: 42%.

Millennials (25-44): Bought the same homes for €400,000 with 25-year loans. Debt ratio: 248-285%.

The same housing stock costs 8x more relative to income, creating the most leveraged generation in Finnish history.

ℹ️ Metadata

Table ID: statfin_velk_pxt_157q.px
Source: Statistics Finland - Debt statistics
Time Range: 2002-2024
Update: Annual