Interest rate cap
Secure your finances in case of rising interest rates
An interest rate cap helps you ensure that the interest rate on your loan will not exceed a certain level even if interest rates started to rise. If interest rates fall, however, you will benefit from it as usual. You can link an interest rate cap either to a new loan or your existing loan.
How do I benefit from the interest rate cap?
- You will benefit from a low Euribor rate and any decreases in the reference interest rate.
- You can be certain that the interest rate will not increase above the agreed level.
- The interest rate hedge can be taken for a shorter period than the loan, as the amount of interest makes the most difference at the beginning of the loan period when the loan principal is high.
- When the Euribor rate falls below the selected interest rate cap, the loan's reference interest rate will track the Euribor. This enables you to benefit from a low Euribor rate and the possible decrease in interest rates. If the Euribor rate rises, the reference interest rate will not exceed the interest rate cap you have selected.
- A loan with an interest rate cap is flexible because its reference rate is the Euribor. This means you can make changes to the repayment schedule and other details of your loan under the same principles as with other Euribor-linked loans.
- You can take an interest rate cap with a validity of 3, 5, 7 or 10 years. There are also multiple alternatives available for the interest rate cap level, i.e. for the upper limit of the interest rate. You can view the different options on the Prices and interest rates tab.
- You can get an interest rate cap for a loan if the reference rate is the 12-month Euribor.
- You can add the interest rate cap fee to your loan principal to be amortised.
- When you draw down the loan, you pay a fee for the interest rate cap depending on the amount of loan, the validity and level of the cap and the market interest rates. The fee charged for the interest rate cap can also be included in the loan principal.
- The fee charged on the interest rate cap changes daily according to the market fluctuation of the interest rates. You can find out the daily rate for the fee by calling Nordea Customer Service or visiting one of our branches.
|Reference rate||Length||Cap level|
|12 month euribor||3 years||0,50 %|
|12 month euribor||5 years||0,50 %|
|12 month euribor||5 years||1,00 %|
|12 month euribor||7 years||1,50 %|
|12 month euribor||7 years||2,00 %|
Standard European Consumer Credit Information
To make comparing easier, the applicant has the right to receive the key information on the credit on a Standard European Consumer Credit Information form before signing the credit agreement. The information on the form may be calculated with the details given by the customer or on typical values. The form on this page is calculated with typical values, which means that a typical euro amount for this credit type is applied.
The form specifies the lender's contact information, the main features of the credit product, the costs, other important legal aspects and, if needed, the additional information required for distance selling.
The information on the form may be binding or unbinding on the lender. A binding form requires a positive credit decision.
Advice on housing
With the right interest hedging products, you can protect your finances even when market interest rates change drastically.
FlexiPayment gives you leeway for your monthly loan repayment. Another alternative is to extend your instalment-free period. See which one suits you better.