Repayment method affects your monthly payment, loan period and interest expenses

The repayment method of your home loan means the way you will repay your loan. You will select the method when you negotiate on a loan with us. The interest on your home loan changes when the value of the reference rate changes, which will affect either your monthly payment or loan period, depending on the repayment method you have chosen. 

Since the monthly payment always includes the instalment and interest in a certain proportion, the choice of repayment method also decides this proportion and affects the interest expenses accruing during the loan period. 

Which repayment method should I choose?

When you’re choosing the repayment method, you should consider the choice from different aspects, such as whether you want to pay the same amount every month or whether you prefer to pay off the loan within a specific time period.

You will decide on the repayment method when we negotiate on the loan. We will introduce the various methods to you and help you choose the one that suits your circumstances and loan application the best. 

Can I change the repayment method in my existing home loan?

If your situation in life changes, you may find that another repayment method would suit you better. For example, you may want to re-evaluate your repayment method with us if your costs jump, if you change jobs or if you change homes. 

If you want to change your repayment method during the loan period, apply for a change to your loan in Nordea Netbank or Mobile. We will send you a message confirming the change, or if the change requires your signature, we will send you a new repayment schedule for digital signing. 

You will need to pay a fee of 150,00 € for changing the repayment schedule as a self-service in Nordea Netbank or Mobile.

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Schedule a meeting with us

If you have a home loan from us or if you are our Premium Customer, you can book a meeting with one of our home loan or investment experts. If you want to discuss interest rates, changes in your home loan or your financial situation in general, book a meeting with us.

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Repayment methods

Equal payments (annuity)

Equal payments is a good option if you want to know exactly when the loan period ends and if your repayment ability can withstand a potential rise in interest rates. 

When you choose equal payments as your home loan repayment method:

  • The repayments (instalment + interest) are of equal size at the beginning of the loan period.
  • The repayment will only change if the interest rate changes.
  • Initially, the proportion of the instalment is small, but it increases during the loan period as the proportion of interest decreases.

Equal instalments

Equal instalments is the best choice for you if you want to make larger payments at the beginning of the loan period.

  • The instalment is always the same, but the monthly payment varies based on the interest: If the reference rate rises, the monthly payment increases; if the reference rate decreases, the monthly payment decreases.
  • If the interest rate remains the same, the proportion of interest decreases as the loan principal decreases.

Fixed equal payments

Fixed equal payments is a fitting option if you want to know the exact size of your monthly payments well into the future, and the duration of the loan period is not as important.
  • All your monthly payments will be equal.
  • If the reference rate rises, the loan period is extended, and if the reference rate falls, the loan period shortens. 
  • The monthly payment is always at least equal to the amount of interest.
  • If the interest rate level is very low at the time you draw down the loan, a rise in interest rates may extend the loan period unreasonably, slowing down the amortisation of the loan. In such an event you should contact us and agree on a new repayment plan.

Frequently asked questions about repayment methods

Thinking about taking a payment holiday?

During a payment holiday, you only pay interest without repaying the principal. This will either extend your loan period or increase your future payments. 

Read more about payment holidays