Interest rate on a home loan

Relevant questions about home loan interest rates

What should I do if my monthly home loan payment feels too high?

If you’re struggling with your loan payments, it’s important to know you’re not alone – we can help. Contact us as soon as possible and let’s work out the best solution for you together. You might be able to extend your loan period, take a payment holiday or take advantage of the free FlexiPayment feature included in your home loan. FlexiPayment allows you to reduce your monthly payment in Nordea Mobile or Netbank when you need to. Read how you can use FlexiPayment or apply for a change to your loan repayment.

When should I increase my monthly home loan payment?

The most important thing is that you should be able to afford your monthly home loan payment comfortably. It can be tempting to make overpayments to pay off your loan sooner but it’s better to stick to making affordable monthly payments.

We usually advise people against spending all their money on repaying their loan to make sure they have enough left to cover their day-to-day expenses, to spend on things they enjoy and to build their savings. When you put aside a fixed amount each month, you are growing your wealth and building a savings buffer to prepare for a rise in interest rates. If you’re not sure what would be the best way for you to save, book an appointment with one of our investment experts. 

When should I hedge my home loan against rising interest rates?

It’s good to consider how much higher interest costs you can afford so that your home loan costs will also leave you room to save some money, pay your normal day-to-day expenses and spend on things you enjoy. When you choose a fixed rate for your home loan or a part of it, or hedge your home loan against rising interest rates, you will always know the maximum amount of interest you will have to pay.

If a part of your home loan has a variable rate, your monthly payment may decrease when interest rates fall. Contact our home loan experts to find out the best solution for you. Read about how you can protect yourself against higher rates.

When will the interest rate on my loan change?

The loan reference rate is always revised on the interest rate adjustment date. You can check the next interest rate adjustment date of your home loan in Nordea Mobile or Netbank under the loan’s details. The interest rate adjustment date depends on the reference rate of your home loan. The reference rate of a home loan tied to the 12-month Euribor is revised every 12 months, whereas the reference rate of a home loan tied to the 6-month Euribor is revised every 6 months. The reference rate is locked to the rate valid two banking days before the adjustment date and it remains fixed until the next interest rate adjustment date. In other words, your reference rate doesn’t change daily according to market fluctuations but only on the interest rate adjustment dates. The interest rate adjustment date is determined on the drawdown date.

How much can my loan repayment increase as interest rates rise?

As interest rates rise, many things, including your remaining loan amount, loan period and the repayment method you have chosen, will affect your monthly payment and interest costs. Before granting you a home loan, we always test your loan with a 6% interest rate to make sure your finances will hold up even in the event of interest rate rises. The table below contains examples of a loan payment at various interest rate levels – it gives you an approximate idea of how much a loan payment changes with different interest rates. You can gain an idea of the amount of your own monthly payment using our home loan calculator.

Loan payment at various reference rates	0% (total interest rate 0.8%)	1% (total interest rate 1.8%)	2% (total interest rate 2.8%)	3% (total interest rate 3.8%)
EUR 100,000	EUR 371	EUR 418	EUR 469	EUR 523
EUR 150,000	EUR 556	EUR 626	EUR 702	EUR 783
EUR 200,000	EUR 740	EUR 834	EUR 935	EUR 1,043
EUR 300,000	EUR 1,108	EUR 1,249	EUR 1,401	EUR 1,563
EUR 400,000	EUR 1,477	EUR 1,656	EUR 1,867	EUR 2,083

In the examples, the loan payments are calculated based on a 25-year annuity loan with an interest rate margin of 0.8%. The amount includes both the monthly instalment and the interest. The calculation is indicative. Updated 20 June 2022.

Should I convert my housing company loan into a personal loan?

When you apply for a personal loan, we always assess your overall finances and budget before granting the loan. This allows us to find you a flexible solution that suits your finances. 

When you take out your share of a housing company loan, you can also negotiate on individual loan terms and conditions with the bank, including a monthly payment that fits your budget, a personalised margin and the length of your repayment period. Our home loans include a free FlexiPayment feature, which allows you to choose instalment-free months or repay your loan faster without asking us first. Read more and book a meeting with one of our home loan advisers.

I’m planning to build a house. What should I do now that construction costs are rising?

If you’re planning to build a house, we recommend that you prepare for higher costs by adding a buffer to your budget. If your building project is already under way and higher costs have caught you by surprise, you may have to consider adjusting your plans in some way to keep your costs within your planned budget. If necessary, contact us so we can find a solution for your situation together.