The interest on your home loan is composed of a reference rate and a margin.

The margin of your home loan will remain the same throughout the loan period, whereas the reference rate will fluctuate according to the market movements. This means that the interest on your loan may rise or fall during the loan period. 

The most commonly used reference rate in Finnish home loans is the 12-month Euribor. It’s a variable interest rate, and the interest on your loan will change every 12 months to reflect the rise or fall in the Euribor rate. 

There are also other reference rate options available, such as the 6-month Euribor and Nordea’s own reference rate Nordea Prime.

Flexibility for your home loan

You can apply for a payment holiday for your loan or for a change of interest rate or repayment method, for instance. If you want to adjust your monthly payment, FlexiPayment is usually the most convenient way to do it in Nordea Mobile or Netbank.

Read more about your options

What factors affect the home loan margin?

The margin we charge for your home loan depends on your circumstances, including the collateral you can provide and your repayment ability. From our point of view, the margin covers the risk we take by granting the loan and our expenses.

We agree on the margin separately with each customer and for each loan, and record it in the loan agreement. You can check the reference rate and margin applied to your home loan easily in Nordea Mobile or Netbank under your loan details.

Annual percentage rate of charge also accounts for other loan servicing costs

Besides interest, your home loan includes other loan servicing costs, which are taken into account in calculating the home loan’s annual percentage rate of charge.

That’s why we recommend that you check the annual percentage rate of charge when you compare home loan offers.

Home loan interest is always stress tested

When you negotiate with us on a home loan, we will perform a stress test on your loan costs. We calculate how your total loan costs would change if the loan interest rose to 6%. This is one way for us and for you to ensure that you will have enough money left to service your loan after your other expenses.

You should also save while you repay your loan to ensure that you can cover rising interest rates or other unexpected expenses without crippling your finances.

You can deduct home loan interest in your taxation, which reduces your interest expenses. 

Frequently asked questions

Wondering about the effect of rising interest rates?

Protect your loan and finances against rising interest rates and costs by saving or with interest rate hedging.

Read about how you can protect your finances against higher rates

What should you know about Euribor rates?

Our experts Chief Analyst Jan von Gerich and Jussi Pajala, CEO of Nordea Mortgage Bank, know Euribor rates in and out and tell you what you need to know about them.

Read what our experts say about Euribor rates

Loan reference rates

Euribor is the most commonly used reference rate in Finland. Other reference rate options include a fixed rate and Nordea Prime.

Read more about other reference rates