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 150,000 euros and the loan period is set at 20 years. The agreed reference rate is the 12-month Euribor and the margin is 0.55 % (September 2019). You choose to add an interest rate collar to your loan for 7 years, which will set the minimum level of the reference rate at 0.22 % and the maximum level at 1.10 % (levels in September 2019). The APR is 0.8 % and includes an opening fee of 600 euros and a monthly fee of 2.30 euros for automatic debiting of loan payments. The number of payments is 240. The total amount of the loan plus credit costs is 161,723 euros. During the validity of the interest collar, the monthly payment (annuity) will be 678 euros and after the validity has ended, the monthly payment will be 668 euros.

The APR has been calculated using the Finnish Financial supervisory Authority´s assumed loan period ( FIN-FSA regulations and guidelines 15/2013: Marketing of financial services and products), which is a representative example for Nordea´s housing loans. 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.

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