Renovation Loan

A renovation loan is there for you if you want to improve your living conditions and renovate or partially reconstruct your home. A renovation loan is the best solution for you if you want to replace the roof, doors or windows of your home, or renovate your kitchen or bathroom
  • Applying for a renovation loan is flexible and easy – you can do it alone or with a co-applicant. The total loan and lease payments must not exceed 40% of the income of the loan applicants.
  • The minimum loan is 3,200 euros and the maximum loan must not exceed 66% of the market value of your collateral.
  • 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.
  • You can use any property that can be mortgaged as collateral for your loan.
  • If you want to apply for a loan, you need not have been a customer of Nordea Bank before.
Conveniently long loan term
  • The maximum term for a renovation loan is 20 years
  • You will have to pay the loan back before you turn 70

Choose your payment schedule

As a rule, the total loan and lease payments must not exceed 40% of the income of the loan applicants.
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 the advantage of the annuity payment schedule is that you pay the same amount each month but the disadvantage is that you pay more interest in total over the entire loan period. The advantage of the fixed principal payment schedule, on the other hand, is that you pay steadily less each month as time goes on, but the disadvantage is that you pay more each month at the beginning of the loan period.

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 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.

What can be used as collateral for the loan?

You can use any property that can be mortgaged as collateral for your loan. The maximum loan must not exceed 66% of the market value of your collateral.

Nordea Bank accepts all property insurance companies registered in Estonia and licensed by the Financial Supervision Authority that are pledged in favour of Nordea 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.
  • You must set Nordea Bank AB (reg nr 516406-0120) 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 or to Nordea Pank Eesti, Liivalaia 45, 10145 Tallinn.
  • 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 Nordea Bank over the last six months, you do not have to submit any account statements.
  • A valuation report (in Estonian) of your loan collateral drawn up by a real estate agency accepted by Nordea.
  • A loan application. You can submit your application on paperPDF or online. If you are a Nordea 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 renovation loan contract:

  • A fee for a valuation of the property
  • A contract fee
  • A notary fee and state fees
  • Property insurance

NB! Starting from 1th of February 2017 Nordea bank's price list will be changed. Familiarize with price lists.Opens new window

Housing loan
Contract fee 2 %* of the loan amount, min 100 €
Increasing the loan amount 2 % of the additional amount, min 100 €
Granting a grace period following the birth of a child (until the child’s first birthday)2 30 €
Granting a grace period under other circumstances2 60 €
Changing the monthly payment date 2 Once a year free of charge
Changing other terms and conditions of the loan contract / Changing collateral 1 % of the loan balance, min 200 €
Early repayment of the loan either in part or in full

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 collateral 50 €
Penalty for failure to submit the insurance policy of the collateral 100 €

* 30% discount for Gold customers. 15% discount for Silver customers.
2 Not applicable to loans with a fixed base rate or loans with a limit on interest rate rises.