Last year, as part of its economic growth strategy, the Finnish government decided to raise the current 30-year housing loan cap. Parliament approved the change in December, and it is due to go into force at the beginning of April.

For households that choose an extended mortgage period, it will mean smaller monthly payments. But in the long term, it will mean paying off significantly larger interest costs.

For example, on a 125,000-euro loan with a 35-year mortgage, monthly payments would be roughly 46 euros less than they would be for a 30-year mortgage. On the other hand, the interest accrued in the extended loan will bring additional interest costs of more than 10,000 euros.

According to the chief economist at the Mortgage Society of Finland (Hypo) Juho Keskinen, raising the mortgage period will likely have a minimal impact.

"The change will offer flexibility for the debt payer's everyday life, but its impact on the economy will not be very dramatic," Keskinen said.

At the moment, only about a third of Finland's home mortgages exceed 25 years.

At the end of last year, Finnish owner-occupied housing loans amounted to around 96.7 billion euros, with average mortgage repayment periods of slightly less than 23 years.

Keskinen said that he does not think raising the mortgage period cap would "turn the market around".

Minimum down payment plans, too

The government would also like to raise mortgages' maximum loan-to-value ratio from the current 90 percent to 95 percent.

That would mean prospective borrowers would need to pay less in down payments, which has only been possible for first-time mortgages.

Those plans are still pending, as such decisions lie with the country's Financial Supervisory Authority (FIN-FSA).

The government has contended that lowering minimum down payments would accelerate housing sales during an economic downturn.

Hypo's chief economist Keskinen said that if FIN-FSA does decide to raise the maximum loan-to-value ratio, it could have an impact on people who would like to purchase a home, but haven't had enough for the down payment to do so.

Measures aim to boost household savings

The government has said that the changes are aimed at boosting housing sales, household consumption, and to encourage people to save for the future. In the long term, once the real estate market perks up again, housing prices will begin to tick upward, following cyclical price trends.

The Bank of Finland's senior adviser Jukka Vauhkonen voiced skepticism about the mortgage rule changes' effect on accelerating household savings and investments.

"The extension of mortgage terms has typically led to an increase in mortgage loan sizes, more than increasing savings," he said.

But Hypo's Keskinen said he thinks the changes could have a stimulating effect on the housing market.

"It could offer a wider range of buyers opportunities to get bigger loans and to own their own homes," Keskinen explained.

BoF: Changes risk raising household debt

According to the Bank of Finland, the biggest risk in changing mortgage terms is its impact on household debt. Both the European Central Bank (ECB) and FIN-FSA have expressed similar long-term concerns.

"In the long term, this may encourage borrowers to take out very large mortgage loans, as a result of which the proportion of heavily indebted households will increase," the central bank's Vauhkonen said, adding that he thinks the changes coming in April are taking the wrong direction.

"Current [mortgage] regulations are primarily designed to maintain financial stability. I find this easing of regulations to be very bad," Vauhkonen said.

Yle News' All Points North podcast explored whether the Finnish housing market was picking up. Years of falling prices have cooled confidence, but as borrowing costs stabilise, some buyers see opportunity where others see risk.