How should our home loan customers prepare for a rise in interest rates?

The monthly home loan payment is often the largest single expense in a household. Therefore it’s good to consider how much higher interest costs you can afford so that in addition to your home loan costs you can also save some money, pay your normal day-to-day expenses and spend money on something you enjoy.   

  1. One way to prepare for an increase in expenses is to put money aside in advance. You can use the buffer if your loan servicing costs increase. With a buffer in place, it’s easy for you to start growing your wealth. Read why you should save while paying off your loan.
  2. You can protect your finances with interest rate hedging, so you'll know your maximum monthly payment in advance. This will prevent the interest rate on your loan from rising beyond what you can afford.

How will interest rate movements affect your home loan?

How will interest rates change, have they stopped rising and other questions about interest rates.  

Read our answers to frequently asked questions about interest rate movements. 

Prepare for future expenses by saving and investing

Regular saving alongside paying off your home loan helps you build a financial buffer. It often makes sense to save in funds every month.

You can also book a meeting for investment advice with us and together we will prepare a savings plan that suits your finances.

Book a free investment advice meeting

Interest rate collar

The interest rate collar will keep the monthly payment on your home loan within the agreed limits throughout the hedging period. 

  • You can agree on an interest rate collar for 5, 7 or 10 years.
  • There is no separate hedging fee.
  • The hedge can be added to a new or an existing loan. 

Read more about the interest rate collar

Home loan with a fixed interest rate

A fixed rate loan has a set interest rate that does not change over the loan period. It’s easier for you to stay in control of your finances when you know the exact amount of your monthly loan payment in advance. 

  • You can fix the interest on a loan exceeding 20,000 euros for a period of 3, 5, 10 or 15 years.
  • If you have a home loan with a fixed interest rate and want to change the repayment schedule, you need to contact us as you can’t make any changes online.
  • If you decide to repay your fixed rate loan early, you will usually have to pay us compensation if the interest rate of a corresponding new loan is lower than your loan interest rate. However, we will not compensate you if the interest on a similar new loan is higher than on your loan.

Interested in a fixed rate home loan? Book a meeting with our financial adviser. Contact Nordea Customer Service.

Interest rate cap

The interest rate cap ensures that the reference rate on your loan will never exceed a certain level. In other words, even though the reference rate on your loan changes with market movements, your interest rate will not exceed the agreed cap even if the reference rate does. If the reference rate goes down, your loan interest will decrease.

  • You can take an interest rate cap with a validity of 3, 5, 7 or 10 years.
  • You can flexibly change your loan’s repayment schedule.
  • You have to pay a hedging fee for an interest rate cap.

Read more about the interest rate cap

You don’t have to face your worries alone

We’re here for you. We offer you solutions that add flexibility to your loan payments and other expenses.

Explore our solutions

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