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Homeownership has traditionally paid off in Finland

According to Economist Juho Kostiainen from Nordea, home ownership has been more financially viable than renting a home in the long run even though the monthly expenses are usually a little higher. 

“The costs of owning your home – the interest expenses and the maintenance charge – have mostly been lower than the rent for a similarly sized home. The homeowner is building their wealth by paying off their loan and waiting for the value of their home to increase,” Juho Kostiainen says.

When you live in your own home, you pay ‘rent’ to yourself. Furthermore, you can benefit from any increase in the value of your home, depending on its condition, the development of the residential area and the housing market situation.

You should consider buying your first home when you have a regular income and the necessary amount of savings for applying for a home loan and buying a home.

High interest rates have been a challenge to home ownership

In recent years, changing interest rates have also challenged home ownership, as housing costs have increased. Many things, including your loan amount, loan period and reference rate, will affect your monthly loan payment. If your home loan doesn’t have an interest rate hedge, your monthly loan payment may have increased several hundreds of euros.

“The rapid rise in interest rates over the past two years combined with the moderate rise in rents has made renting a home more attractive in the short term. If you have financed your home entirely with debt, the monthly cost – the maintenance charge and interest expenses – is currently about the same as the rent for a similarly sized home in the Greater Helsinki area,” Juho Kostiainen says.

The survey* we commissioned in September revealed that 22% of Finns feel that the current interest rate level prevents them from buying a home or changing homes. The share did not change from the previous survey conducted in February 2024.

When you’re thinking about buying a home or changing homes, you should consider both the current and future costs.

Read our tips for changing homes

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Adjust the monthly payment of your home loan with FlexiPayment

Most of our home loans include a unique FlexiPayment feature that adds flexibility to your loan repayments.

It allows you to decrease or increase your monthly payment free of charge in Nordea Mobile or Netbank whenever you want without asking us first.

Read more about FlexiPayment

Cost of home ownership compared to income

In this example, Juho Kostiainen looks at the monthly costs of owning a 50 m² one-bedroom apartment in the Greater Helsinki area compared to an average salary.

In 2021, the monthly cost for such an apartment, including maintenance charge, interest and loan payment, accounted for about 29% of the average gross monthly salary in Finland (3,685 euros). In 2022 and 2023, housing costs rose to 41% of average income on the back of higher interest rates and maintenance charges.

Over the past two years, the situation has eased: the prices of one-bedroom apartments in the Greater Helsinki area have fallen by 15%, interest rates have dropped from 4% to 2% and average earnings have grown by 7%.

“As things currently stand in autumn 2025, interest, maintenance charges and loan payments account for 30.1% of the average monthly salary. This means that housing costs are nearly at the same level as four years ago,” says Juho Kostiainen.

The calculation assumes the apartment is fully financed with a 25-year annuity loan.

Renting or buying – which makes more sense?

Juho Kostiainen says that the decline in house prices is expected to end this year and interest rates are expected to stabilise at current levels. “Falling house prices and interest rates have made home ownership attractive again compared to renting, even though rent growth has remained subdued.”

Long-term trends also favour homeowners. Juho Kostiainen has drafted a calculation of costs of renting and owning a typical one-bedroom flat in the Greater Helsinki area in 2006–2024. 

The calculation indicates that the total rent for the 18 years was 191,511 euros. This is 352 euros more than the homeowner’s loan repayments, interest expenses and maintenance charges in total. 

By the end of the 18-year period, the homeowner’s wealth had grown to 180,358 euros when taking into account the value appreciation of the flat, whereas the tenant didn’t build up any wealth.

A calculation of costs and benefits of renting and owning a one-bedroom flat in the Greater Helsinki area in 2006–2024

Example calculation
CalculationRent 2006–2024Ownership 2006–2024
Rent191,511
Maintenance charge45,816
Interest expenses44,897
Repayments100,446
Cash flow191,511191,159
Value appreciation79,913
Wealth (value appreciation + repayments)0180,358

Homeowners seek stability and wealth

Based on our survey* 63% of Finns own their homes. This percentage has remained stable for years.

For more than every second Finn (53%), owning a home is a way to gain stability and a desirable means to build your wealth. Stability is particularly important to people over 35.

*The survey, which was commissioned by Nordea and conducted by Kantar Finland from 17 to 23 September 2024, interviewed 1,161 Finns aged 18 to 79 using an online panel. An interview of 1,000 respondents with a confidence level of 95% has a margin of error of ±1.5–3% depending on the answer.

Read more from our press release (in Finnish)

Various forms of housing

Read more about the differences of various forms of housing

Apartment in a housing company
Single-family home
Right-of-occupancy home
Rental home

Apartment in a housing company

If you buy an apartment in a housing company, you buy the shares that entitle you to occupy a home usually in a block of flats, a terraced house or a semi-detached house. When buying shares in a housing company, you also have to pay asset transfer tax.

You will pay a charge for common expenses each month which may consist of a maintenance charge and a charge for financial costs. The housing company’s expenses are covered with the maintenance charge. With the charge for financial costs, you will pay your share of the housing company loan taken for renovation. In the case of new residential buildings, the repayment of your share of the charge for financial costs may begin only after a few years.

In addition, you may need to pay for water, a parking space and the building sauna and a plot rent.

You can also carry out small refurbishments, such as putting up wallpapers or painting the flat. You’ll need the housing company’s permission, and possibly a building permit, for larger renovations. On the other hand, the housing company is responsible for the condition of the buildings and flats.

Single-family home

Buying a single-family home means that you buy a property consisting of an area of land and buildings. The house can also be located on leased land. When you buy a single-family home, you have to pay asset transfer tax in addition to the purchase price.

Living in a single-family home means that you pay for the maintenance, repairs and renovations of your home. In addition, you pay for heating and waste management in addition to property tax and a plot rent, if applicable.

As an owner of a single-family home, you are responsible for keeping your home in a good condition and carrying out the necessary repairs. You are also responsible for maintaining and renovating your property as well as financing these expenditures.

Right-of-occupancy home

Right-of-occupancy is a form of housing in-between a rental flat and a home of your own to which you own the right of occupancy as the resident.

You will have to pay a charge on the right of occupancy which will be refunded, revised with the construction cost index, after you move away. When you live in a right-of-occupancy home, you pay a monthly maintenance charge. In addition, you may need to pay for water, a parking space and the building sauna.

The owner is usually responsible for the maintenance of the home, but you can carry out maintenance work and repairs. However, you’ll need the owner’s permission for any alteration work.

Rental home

When you rent a home, you can live in the home either for a fixed period or until further notice according to the rental contract. A fixed-term rental contract binds both the landlord and the tenant for the agreed period, whereas an ongoing rental contract can be terminated by the tenant with a notice period of one month.

When you are moving to a rental home, you usually pay a rental security deposit that equals one to three months’ rent. The rental security deposit will be refunded to you after the expiry of the rental contract if the home is in a good shape. In addition to the monthly rent, you may need to pay for water, electricity, a parking space and the building sauna.

The financial risk related to renting a home is often smaller, as you are not liable for renovations made by the housing company, for example. The landlord is responsible for the general tasks related to the maintenance of the home. For example, if your stove or fridge breaks down, your landlord is responsible for getting you a new one.

On the other hand, if you want to carry out small refurbishments, such as painting the walls, you’ll need to obtain the consent of the landlord.

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