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

Worried about your loan's interest expenses?

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

Example: You take out a housing loan of 180,000 euros and the loan period is set at 25 years. The agreed reference rate is the 12-month Euribor and the margin is 0.60 % (August 2020). You choose to add an interest rate collar to your loan for 5 years, which will set the minimum level of the reference rate at 3.60 % and the maximum level at 4.33 % (levels in October 2022). The APR is 2.5 % and includes an opening fee of 720 euros and a monthly fee of 2.50 euros for automatic debiting of loan payments. The number of payments is 300. The total amount of the loan plus credit costs is 238,690 euros. During the validity of the interest collar, the monthly payment (annuity) will be 860 euros and after the validity has ended, the monthly payment will be 776 euros.

The amount of the loan and interest is a representative example for 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.

If you are buying a property, you must take into account the registration of title and mortgage costs and the 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.