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.
- You can choose between two base rates, the six-month Euribor (European Interbank Offered Rate) or Nordea EUR Prime. If you want, you can fix a limit for the interest rate of your loan. For more information see A housing loan with a limit on interest rate increases.
- Your individual margin depends on your financial situation and other circumstances.
Annual percentage rate for the renovation loan
For example, when taking a renovation loan in the sum of 5 000 euros, with a floating loan interest of 6.35% a year, loan period 240 moths and agreement fee 100 euros, the preliminary percentage rate of charge is 6.61%. 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.