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Secure your home with interest rate hedging

The monthly home loan payment is often the largest single expense in a household, which is why it makes sense to hedge against the risks it involves. One way to prepare for a rise in interest rates is to grow your savings. Another option which can bring you some financial peace of mind is interest rate hedging.

Wondering about the effect of rising interest rates?

The reference rates for home loans have begun to rise – read what a home owner or home buyer should know about rising interest rates and how to prepare for them.

Read our answers to frequently asked questions about rising interest rates

How can you prepare for higher interest rates?

If you have a home loan, we encourage you to assess how your finances will withstand higher interest rates and to find ways to protect yourself against them. 

One way to prepare for rising interest rates is to put money aside in advance. This gives you a buffer you could use if your loan servicing costs increase. You can book a free meeting for investment advice with us if you want to hear how saving monthly while paying off your loan can give you some extra leeway.

You can also protect your finances with interest rate hedging to prevent the interest rate on your loan from rising beyond what you can afford. When you purchase an interest rate hedge, you always know the maximum monthly payment on your home loan. 

You can choose from the following interest rate hedging options:

  • Interest rate cap
  • Fixed-rate home loan 

The interest rate cap is ideal if:

  • you want to benefit from low reference rates
  • you want the reference rate of your loan to decrease when interest rates fall
  • you want to make sure that the interest costs of your loan remain in check regardless of the market situation
  • you appreciate the possibility of making changes to your loan repayment schedule flexibly

The interest rate cap is subject to a fee set in our tariff

Read more about the interest rate cap

The interest rate collar is ideal if:

  • it is important for you that your monthly payment remains under control regardless of the interest rate
  • you appreciate the possibility of making changes to your loan repayment schedule flexibly
  • you want to benefit from low interest rates in future, too
  • you appreciate an affordable interest rate hedge.

Read more about the interest rate collar

A fixed interest rate is ideal if:

  • you want to know the exact amount of your monthly loan repayment in advance
  • you want to have your interest rate fixed for 3, 5, 7 or up to 15 years
  • your loan amount exceeds 20,000 euros
  • you are ready to pay for the possible penalty fees arising from early repayment.

Please note that if you have a fixed-rate home loan, you will not be able to make changes to your repayment plan and paying off your loan early may result in an early repayment charge.

Interested in a fixed-rate home loan? Contact Nordea Customer Service.

The best time to start monthly saving is now

You handle a lot of your regular expenses with monthly payments – why not make savings in the same way? The best time to start monthly saving is right now.

Read more about benefits of monthly saving

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