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.
Options to cap interest cost
Nordea recommends housing loan customers the following options to cap interest cost:
- With Interest protection Collar, your housing loan interest cost remains in set limits and does not rise above the agreed maximum level.
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.