Latvala had got his advantage up to 31s over Volkswagen team-mate and reigning World Rally champion Ogier by Saturday afternoon, having led his home event from the outset.
But then a heavy impact with a rut in the road on the second running of the Jukojarvi stage damaged the brakes on Latvala's VW Polo.
He immediately lost 11s of his advantage and although he attempted a temporary repair on the following road section, he had to limp through the next three stages without a right-front brake.
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Ogier instantly mounted a charge as his hopes of victory were revived, and Latvala only just clung on to his lead at the end of the day.
Afterwards Latvala declared that he would throw caution to the wind over Sunday morning's three-stage finale.
"I did not come here to lose this rally," he said.
"Tomorrow will be very, very risk-taking.
"I don't care about the championship anymore. Now it's about Rally Finland."
In the wake of the lead fight, Kris Meeke and Andreas Mikkelsen remain on course for third and fourth places.
Mads Ostberg was unable to rejoin from midday service as Citroen discovered that an impact with a rock on the morning's final stage had damaged his rollcage.
That elevated Mikko Hirvonen to fifth, although damper damage from the same stage as Latvala's issue left the Finn driving cautiously all afternoon.
Hayden Paddon remains sixth, having produced his best World Rally Car form yet to keep his Hyundai team-mate Juho Hanninen at arm's length.
Elfyn Evans and Craig Breen continue in eighth and ninth, while Robert Kubica had a trouble-free day having rejoined after his Friday crash, but is still outside the overall top 40.
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