Housing Loan

With a housing loan you can buy, build or renovate a home. Read more about the conditions of the loan now, so that you can act quickly when you find the right home.
  • As a rule, we offer loans for up to 80% of the market value of the residential property that you intend to buy. Under certain conditions, for example if you have a KredEx guarantee or additional collateral, you can also get a loan that covers 90% to 100% of the value.
  •  In Tallinn and Harjumaa, the minimum housing loan is 6,400 euros and elsewhere in Estonia it is 3,200 euros. You can apply for a loan alone or with a co-applicant. 
  • If you live in Tallinn or Harjumaa, your minimum monthly net income needs to be 640 euros, and if you live elsewhere it needs to be 540 euros. In Tallinn or Harjumaa, your family's minimum monthly net income needs to be 960 euros, elsewhere in Estonia it needs to be 830 euros.
  • When you apply for a housing loan, we also look at your total loan and lease payments, and how much they make up proportionally of your and your co-applicant's income. These payments must not exceed 40% of the income of the loan applicants.
  • The housing loan interest is made up of the base interest and a personalised customer margin.

  • If you want to apply for a loan, you do not have to have been a customer of our bank before. You can also apply for refinancing for a housing loan that you have previously taken from another bank.

Flexible loan term, convenient grace period'
  • The maximum term of a housing loan is 30 years. The longer your loan is for, the less you have to pay back each month. You will have to pay back the loan before you turn 67.
  • You can apply for a grace period of up to six months. During a grace period you only need to pay the interest on your loan.
Choose your payment schedule

You need to make payments each month in order to repay your loan. You can choose between an annuity payment schedule or a fixed principal payment schedule.

  • If you choose an annuity schedule, you pay the same amount each month. At the beginning of the loan period a major part of your loan payments consist of interest but with each subsequent monthly payment your payments will increasingly consist of the principal. Interest is calculated on the loan balance.
  • If you choose a payment schedule where the principal repayments are fixed, the principal is divided into equal parts and interest is added to each of these parts. As interest is calculated on the loan balance, your monthly payments become smaller each month.

So with the annuity payment schedule you pay the same amount each month but you pay more interest in total over the whole loan period. With the fixed principal payment schedule on the other hand, you pay more each month at the beginning of the loan period and steadily less each month as time goes on. The total amount of interest that you pay for the whole loan period is smaller.

How can I reduce the part of the property price that I must pay myself?

  • You need to put in at least 20% of the market price of the property that you intend to buy, build or renovate.
  • This can be reduced to 10% if you and your co-applicant, if you have one, can apply for a loan as a young family or a young specialist and your loan is guaranteed by KredEx.
  • If you have additional collateral, the part you need to pay may even be as low as 0%.

How is the interest rate calculated?

The interest rate for a housing loan is made up of the base rate and an additional margin that is set individually for each customer.

  • six-month Euribor (European Interbank Offered Rate)
  • Your individual margin depends on your financial situation and other circumstances.
Annual percentage rate for the housing loan

For example, when taking a loan in the sum of 30 000 euros, with a floating loan interest of 3.0% a year, loan period 360 months and agreement fee 300 euros, the preliminary annual percentage rate of charge is 3.08%. The loan security must be insured for the duration of the loan period, but the total amount of insurance costs depends on the insurance provider and terms and conditions of insurance the loan recipient chooses, and therefore is unknown to the loan provider. The loan recipient will pay the state fee and notary`s fee for establishing the security, and therefore, the loan provider is unaware of the final amount.

You can find additional information on annual percentage rates on the website of the Consumer Protection Board.

What is the main collateral and additional collateral?

  • The main collateral for your housing loan is the property that you intend to buy, build or renovate, or another property like a piece of land or an apartment that can be mortgaged.
  • Instead of paying in your share of the price of the property, you can provide additional collateral, which does not have to be owned by you.

Valuation and insurance of collateral

You can get a valuation of your collateral from the real estate agencies accepted by our bank. You will also need to insure the property that provides the collateral for your loan throughout the whole of the loan period.
Bank accepts all property insurance companies registered in Estonia and licensed by the Financial Supervision Authority that are pledged in favour of our bank as insurers of assets in Estonia. The list of companies is published on the website of the Financial Supervision Authority.

  • The loan contract states that you need to insure your real estate collateral throughout the entire loan period for at least its reinstatement value.
  • The insurance must cover at least the risk of fire, water and natural disaster, and losses caused by vandalism. The maximum allowed liability rate is 500 euros.
  • You must set Luminor Bank AS (reg nr 11315936) as the beneficiary in the insurance contract.
  • At least three days before your insurance contract expires you will need to submit a new insurance policy to the bank to show that you have entered into a new insurance contract or extended the old contract. Please send the new insurance contract to kindlustused@luminor.ee or to address Liivalaia 45, 10145 Tallinn.

What do I need to apply for a loan?

  • Your passport or ID-card and those of your co-applicant if you have one.
  • Statements from your and your co-applicant's bank account for the last six months. If your income has been transferred to our bank for the last six months, you do not have to submit any account statements.
  • A valuation report (in Estonian) for your loan collateral drawn up by a real estate agency accepted by our bank (in Estonian)
  • A calculation of costs of the work if you plan to renovate or build a house, or other documents on the construction such as the building design, the building permit and the contract with the builder.
  • A loan application. You can submit your application on paperPDF  or online. If you are our customer, you can submit your application through our Netbank.
  • The bank has the right to ask for any additional documents and information  it needs for reviewing the application.
You will have to pay the following fees for your loan contract:
  • A fee for valuation of the property
  • A contract fee
  • A notary fee and state fees
  • Property insurance
  • If applicable, a KredEx guarantee fee of 3% of the value of the collateral. This is a one-off payment that has to be made when the contract is signed.
Housing loan
Contract fee Till 1% of the loan amount, min 190 €
Increasing the loan value 2% of the additional amount, min 100 €
Changing the type of base rate or the type of loan1 1% of the loan balance, min 100 €
Granting a grace period2 60 €
Changing the monthly payment date2 Once a year free of charge

Changing other terms and conditions of the loan contract (incl. changing margin) / Changing collateral

Extending the loan disbursement period

1% of the loan balance, min 200 €

200 €

Early repayment of the loan either in part or in full2 Free of charge if notice is given 3 months in advance; in other cases interest is calculated for up to 3 months on the amount that is repaid early
Changing the current account related to the loan

30 €

Other fees
Evaluation of collateral3 50 €
Penalty for failure to submit the insurance policy of the collateral 100 €

1 The current loan must be repaid first and after that a new loan can be granted.
2 Not applicable to loans with a fixed base rate or loans with a limit on interest rate rises.
3 Starting from 21.03.2017 the service is no longer provided.