Interest rate on a home loan

Frequently asked questions

What is the reference rate of a home loan?

The total interest rate on a home loan consists of the customer-specific margin and the reference rate. The reference rate can be a general market rate, such as the 3-, 6- or 12-month Euribor, a fixed interest rate or a Prime rate. Your margin will remain the same throughout the loan period, whereas the reference rate will fluctuate according to the market interest rates. However, if you have a fixed rate, it will remain unchanged. The most commonly used reference rate in home loans is the 12-month Euribor. You can check the reference rate on your home loan easily in Nordea Mobile or Netbank under your loan details.

When will the interest rate on my loan change?

The loan reference rate is always revised on the interest rate adjustment date. You can check the next interest rate adjustment date of your home loan in Nordea Mobile or Netbank under the loan’s details. The interest rate adjustment date depends on the reference rate of your home loan. The reference rate of a home loan tied to the 12-month Euribor is revised every 12 months, whereas the reference rate of a home loan tied to the 6-month Euribor is revised every 6 months. The reference rate is locked to the rate valid two banking days before the adjustment date and it remains fixed until the next interest rate adjustment date. In other words, your reference rate doesn’t change daily according to market fluctuations but only on the interest rate adjustment dates. The interest rate adjustment date is determined on the drawdown date.

How much can my loan repayment increase as interest rates rise?

As interest rates rise, many things, including your remaining loan amount, loan period and the repayment method you have chosen, will affect your monthly payment and interest costs. Before granting you a home loan, we always test your loan with a 6% interest rate to make sure your finances will hold up even in the event of interest rate rises. The table below contains examples of a loan payment at various interest rate levels – it gives you an approximate idea of how much a loan payment changes with different interest rates. You can gain an idea of the amount of your own monthly payment using our home loan calculator.

Loan payment at various reference rates	0% (total interest rate 0.8%)	1% (total interest rate 1.8%)	2% (total interest rate 2.8%)	3% (total interest rate 3.8%)
EUR 100,000	EUR 371	EUR 418	EUR 469	EUR 523
EUR 150,000	EUR 556	EUR 626	EUR 702	EUR 783
EUR 200,000	EUR 740	EUR 834	EUR 935	EUR 1,043
EUR 300,000	EUR 1,108	EUR 1,249	EUR 1,401	EUR 1,563
EUR 400,000	EUR 1,477	EUR 1,656	EUR 1,867	EUR 2,083

In the examples, the loan payments are calculated based on a 25-year annuity loan with an interest rate margin of 0.8%. The amount includes both the monthly instalment and the interest. The calculation is indicative. Updated 20 June 2022.

I’m planning to build a house. What should I do now that construction costs are rising?

If you’re planning to build a house, we recommend that you prepare for higher costs by adding a buffer to your budget. If your building project is already under way and higher costs have caught you by surprise, you may have to consider adjusting your plans in some way to keep your costs within your planned budget. If necessary, contact us so we can find a solution for your situation together.