The housing loan amount depends on income and expenses
Your monthly income and expenses lay the ground based on which you can assess the affordable monthly repayment. Higher income allows a higher monthly repayment of the loan but high expenses may decrease the amount of the housing loan to be granted.
As a general rule, it is recommended that no more than one third of your monthly net income should be spent on housing expenses. Housing expenses include a loan repayment and, for example, maintenance charges and water and electricity charges. After the housing and living expenses, you should be able to put money aside each month as a “buffer” against unexpected expenditure.
Read more about the cap on and the self-financing share of housing loans
Be prepared for surprises
Within the next couple of years, housing loan interest rates will not necessarily rise to any significant extent, but after a number of years this may not be the case. If interest rates rose by several percentages, they could raise the monthly payment by tens of euros or, alternatively, prolong the loan period considerably. The best way of hedging against interest fluctuation is to attach interest hedge to your housing loan. Interest rate collar and interest rate cap guarantee peace of mind to our housing loan customers.
The security for your housing loan also determines how much loan you can get. The primary security is the home you are buying. If the value of the home is not enough, you can obtain more security by buying it or through a state guarantee, for example. Read more about security for a housing loan here.
Life may also bring such unexpected turns as unemployment or illness, which may affect your ability to repay the loan. You should prepare for unexpected expenses beforehand to the extent possible. We are happy to help you map out your situation and any risk factors affecting the housing loan amount.
Effect of home savings
One prerequisite for obtaining a housing loan is that you have savings of your own, usually 15 % and as a first-time home buyers 5 % of the purchase price of the home. Persons taking out an ASP loan must have savings amounting to 10% of the home price at minimum. The percentage varies according to the size and location of the home: in the Greater Helsinki area in particular, flats and houses may be significantly more expensive than elsewhere in Finland, and thus the required housing loan must be bigger.
The final amount of a housing loan is always determined at a personal loan negotiation, but you can conveniently get an indicative estimate on the loan and monthly payment amounts with our housing loan calculator. You can also fill in a housing loan application online or contact us to find out more.