Take a free payment holiday when you’re on parental leave

You can get a payment holiday of up to six months on your home loan free of charge if you apply for one when you’re on parental leave. The payment holiday can extend up to 12 months if both guardians take parental leave and each of them applies for a 6-month payment holiday.

During the payment holiday, you only pay interest and expenses for the loan. 

This benefit is intended to help families with children balance their daily finances and to support a more equal distribution of parental leaves in Finland. 

Even if you have already taken a payment holiday, you can still apply for this benefit. A payment holiday does not affect the FlexiPayment feature included in your loan.

The normal fee for a payment holiday is 150 euros when applied for online and 250 euros when applied for through our Customer Service. 

You can increase your monthly household budget by about 460 euros by taking a payment holiday

Based on our example calculation, taking a 12-month payment holiday when you have a home loan of 200,000 euros increases your household budget by 458 euros a month, leaving you with nearly 5,500 euros more money to spend on everyday expenses for the year.

The example calculation is based on an equal payment (annuity) loan of 200,000 euros with a 25-year loan period since this is the most common repayment method in Finland. The calculation is a simulation of a real situation and assumes that the customer takes a payment holiday from the beginning of the third year of repaying their loan. At the start of the payment holiday, the customer would have repaid their loan for 2 years and 2 months and there would be 22 years and 10 months left of their loan period.

In this example, taking a payment holiday means that the loan payments the customer skips will be added to the end of the loan period, extending the loan repayment. There is also a way to take a payment holiday without extending your loan period. In this case, you would make slightly larger monthly payments after the payment holiday.

How did the parental leave reform affect families?

The parental leave reform entered into force in autumn 2022. The purpose of the reform was to help families share the leave more equitably than before. At the moment, only one in five fathers use up all the parental leave to which they are entitled. The new parental leave concept brought more equality to families, as both parents have the opportunity to spend time with their child and engage with their development from the very beginning.

The new family leave model treats children equally regardless of what their family is like. Diverse families were also considered, and parental leave is available to a guardian of a child as well.

With the reform, earnings-based parental allowance is now paid out for a total of 320 days. A pregnant woman is entitled to a pregnancy allowance for 40 weekdays.

For a child with two parents, the parental leave allocation is equally divided between them, i.e. each parent can take 160 weekdays of parental leave. A parent may donate a maximum of 63 weekdays from their allocation to the other parent or to another person caring for the child.

How should I manage my finances on parental allowance?

A family should always have savings equal to a few months’ earnings as a backup. Also, because the family’s earnings will go down during parental leave, it is recommended to make financial preparations in advance.

The time spent with your child is unique, and you will be able to enjoy it fully if you do some financial planning beforehand. These are some examples of things a family should think about:

  1. Save up some money in advance if you can.
  2. Find out what your earnings will be during the leave.
  3. Work out a monthly budget to see which of the family’s expenses are essential and which are not.
  4. Eliminate any non-essential expenses. It often happens with the birth of a child that some expenses are automatically eliminated and new ones appear.
  5. A child needs many special accessories. Consider what you could purchase second-hand. Are there accessories that you don’t really need?

Part-time parental leave may be a feasible solution for busy parents

It is possible to work part-time and to apply for partial parental allowance for that period. You must agree on the part-time employment with your employer. When working part-time, your working hours may be no more than 5 hours per day.

In terms of the parental allowance allocation, only half a day is used up for each part-time working day. Thus, for example, 10 days on part-time parental leave will decrease your parental leave allocation by 5 days.

Sharing family leave equally is financially beneficial for families

Parental allowance is earnings-based, while child home care allowance is not. It may therefore be more advantageous for the family if the parent with the lower earnings goes to work and the parent with the higher earnings takes parental leave to care for the child.

In financial terms, it is generally not a good idea to use parental leave so that the parent with the lower earnings stays home to care for the child for the entire duration of parental leave.

A more equitable distribution of parental leave improves equality in working life.

Frequently asked questions about parental leave