Mortgages in Finland


Mortgages in Finland
Photo by Juha Roisko

Are you buying an apartment or a house? Or just interested in mortgages? I will tell you about different repayment methods, transfer taxes, and what is a mortgage. If you are going to buy an investment home, then it is a different loan, with a slightly higher interest rate.


In brief, the mortgage consists of a reference rate and a margin. At the moment, reference rates are so low that almost the entire interest rate consists of a margin. 


According to the loan ceiling regulations, the buyer of the home should have their own at least 15% of the apartment or house price. If a first home buyer, a 5% savings on the cost of the home. 


Your income, life situation, and plans also affect your ability to repay your loan. The ability to repay, in turn, affects the availability, amount, and maturity of the loan.

There are also different loan repayment methods:


1. In a loan with equal repayment, the amount of the installment payment is equal for each installment. Instead, the interest rate will decrease after each repayment, provided that no increase in the overall rate results. Borrowing costs are higher in the beginning and decrease towards the end of the loan period.


2. In an annuity system, the amount of the repayment and interest is the same each time for the entire repayment period. Initially, the repayment amount is smaller, and the interest rate higher, and as the loan principal decreases, the repayment share increases, and the interest rate decreases.