As of 1 June 2017, the Finnish Land Code (Fi: Maakaari, 540/1995, as amended) has only allowed granting of electronic real estate mortgage notes for new real estate mortgages and has removed the possibility of converting existing electronic mortgage notes into paper form.
The change is due to amendments introduced in the Finnish Land Code in 2016, which entered into force on 1 June 2017. The amendment replaces physical mortgage notes with "electronic notes", which will, however, legally function in the same way as physical ones. The new system can therefore be described as a hybrid between the somewhat archaic system based on physical possession of pieces of paper, and a system based purely on registration. The purpose of the legislative amendments is to reduce the amount of work and costs associated with handling mortgage notes, and improve the quality of mortgagee information in the title and mortgage register. The change should also remove risks associated with damage to or loss of the mortgage notes.
Existing physical mortgage notes can still be used as a security for a new credit or loan until the end of the transitional period at the beginning of 2020. After this point, when granting security for a new credit or loan, the pledgor must either apply for a new mortgage, for which an electronic mortgage note will be granted, or convert their existing written mortgage notes into an electronic format. Property owners in possession of existing written mortgage notes do not need to take any action unless and until they intend to use the notes as security for a new credit or loan.
In order to facilitate the shift to the fully electronic real estate mortgage system, the National Land Survey will convert the written mortgage notes of private individuals into an electronic format free of charge whenever any amendment to an existing real estate mortgage in applied for. Moreover, written mortgage notes held by banks will also be converted into an electronic format beginning in fall 2017 through a collaboration between banks and the National Land Survey.