Protect your finances from changing interest rates

Benefit from falling interest rates

Enjoy flexible loan features

Benefits of an interest rate cap

  • The monthly loan payment is typically the largest single expense in a household. By hedging against the interest rate risk, you ensure stable finances even in an unstable environment.
  • Your loan's reference rate tracks the Euribor rate but it cannot rise above a specific level. At the same time, you benefit from lower monthly payments when the Euribor rate goes down – all the way to zero.
  • If your loan has an interest rate cap, you can flexibly change your loan’s repayment schedule. 

Free interest rate cap for buyers of YIT Homes

If you buy a turnkey YIT Home between 29 January and 31 August 2024, YIT will pay for a 2% interest rate cap on your home loan. The interest rate cap will be valid for 5 years. This means that the maximum interest rate charged on your loan would be 2% + the loan margin for 5 years. The interest rate cap is available for loans where the reference rate is the 12-month Euribor.

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Read about Nordea’s flexible home loan

Here’s how the interest rate cap works

If you include an interest rate cap in your loan, you will ensure that the reference rate of your loan won’t rise above the agreed level while the cap is in force. The interest rate cap makes sure that your monthly loan payment won’t exceed the defined maximum level even if the reference rate rises above the interest rate cap. The monthly payment comprises the loan instalment, the reference rate and the loan margin.

Korkokatto - maximum limit - large

Interest rate cap for new and existing loans
Level and price

Features of the interest rate cap

  • An interest rate cap can be added to new and existing home loans alike.
  • You can add an interest rate cap to a home loan with 12-month Euribor as the reference rate. This means you can make changes to the repayment schedule and other details of your loan on the same basis as with other Euribor-linked loans.
  • You can choose an interest rate cap that is valid for 3, 5, 7 or 10 years. 

Interest rate cap is also available for existing loans

  • You can agree on an interest rate cap for your new home loan at your loan meeting.
  • If you want to add an interest rate cap to your existing loan, please contact us.
  • You can protect the whole loan or half of it, for example.

Level and price of interest rate cap

  • The actual level and price of an interest rate cap are determined when you draw down the loan, which means that they can deviate from what you have previously discussed with us.
  • The interest rate cap is subject to a separate hedging fee.
  • Contact us to get an offer for an interest rate hedge.

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

You can add an interest rate cap to your 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 150,000 euros and the loan period is set at 24 years. The agreed reference rate is the 12-month Euribor and the margin is 0.53% (April 2024). You choose an interest rate cap of 3.75% for 10 years. This means that the total interest rate of your loan cannot rise above 4.28% during the validity of the interest rate cap. The APR is 4.4%, including an opening fee of 600 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 APR.  The number of payments is 288. The total amount of the loan and loan costs is 240,585 euros. The monthly payment (annuity) is 830 euros and does not include the interest rate cap fee which is paid separately.

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

When buying a home, you also need to pay the costs related to the 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. In some cases, we need the help of a real estate agent to determine the value of your home. We will charge a fee for this service.

Wondering about the effect of rising interest rates?

Protect your loan and finances against rising interest rates and costs by saving or with interest rate hedging.

Read about how you can protect your finances against higher rates

Should I save and invest or pay off my housing loan?

Finns have traditionally repaid their home loans quickly but it may not the best option for most. Wondering why?

Read more about saving while repaying a loan

What would higher interest rates mean for your monthly loan payment?

Use our home loan calculator to see how a change in interest rate would affect your monthly payments.

Try our home loan calculator