Example of an interest rate cap and the annual percentage rate of charge (APR)

Worried about your loan's interest expenses?

Add an interest rate cap to your housing loan to set a maximum level for the reference rate during the validity of the interest rate cap.

Example: You take out a loan of 165,000 euros and the loan period is set at 25 years. The agreed reference rate is the 12-month Euribor and the margin is 0.63 % ( February 2023). You choose an interest rate cap of 3.00 % for 10 years. This way the total interest rate of your loan may only rise to 3.63 % at maximum during the validity of the interest rate cap.  The APR is 4.1 % and includes an opening fee of 660 euros and a monthly fee of 2.50 euros for the automatic debiting of loan payments. Any fees for the interest rate cap have not been taken into account in the calculation of the annual percentage rate of charge.  The number of payments is 300. The total amount of the loan plus credit costs is 262,597 euros. The monthly payment (annuity) is 844 euros and does not include the interest rate cap fee which is paid separately.

The amount of the loan, the loan period and interest are a representative example for the housing loans offered by Nordea. The example, however, is only indicative and has been calculated using certain assumptions. The example does not necessarily correspond to actual APR charged on the granted loan.

When buying a home, you also need to pay costs related to registration of ownership and pledging of your home. You also need to see to it that your home insurance is up to date. In case of a property, you will need fire insurance at the least.

If you are buying a property, you must take into account the registration of title and mortgage costs and the costs charged by the National Land Survey of Finland. In the case of a property, you will also need fire insurance.

In cases where the bank cannot make a security appraisal of the home, the bank will agree with customer on a separate appraisal and charge the costs it from the customer.