How is the loan's interest rate determined?
The interest rate on a housing loan comprises a reference rate and a margin. The reference rate is a publicly quoted interest rate. You and the bank will agree on the margin. You can choose the 12-month Euribor, Nordea Prime, or a fixed interest rate as the reference rate. During the loan negotiation, we can find out which interest alternative suits you best.
How to hedge against rising interest rates?
A low interest rate level is the housing loan borrower's friend. When the interest rates are low, you can amortise your loan quicker. However, you should always be prepared for the possibility that interest rates may rise. Therefore it is important that your loan is sized so that your repayment ability can tolerate a possible increase in interest rates.
If you take out an ASP loan, the state’s interest subsidy will hedge you against rising interest rates for 10 years. If you do not have an ASP loan, you can also buy a hedge against rising interest rates.
Read more about the alternatives offered by Nordea
Determining a suitable repayment plan
When you take out a housing loan, a repayment plan will be drawn up for the loan. You must consider how long you want the repayment period to be and the size of monthly payments you are prepared to commit to. Select a suitable repayment method for your loan: fixed equal payments, equal payments, or equal instalments.
Read more about the repayment methods
What if life surprises you?
You never know in advance what is going to happen, but luckily you can be prepared for surprises. If you become unemployed or fall seriously ill, it is comforting to know that you will not have to leave your home. Loan cover is an insurance policy to guarantee your own and your family’s finances in the event of unemployment, serious illness, accident and death. Talk to your banking adviser or read more about the loan coverOpens new window (in Finnish).