Sure. The income and expenses are assessed in the same way regardless of whether the household has one, two or more people, and you definitely are not the only one doing so. Statistics Finland informs us that as many as 40% of the buyers of a first home are doing so alone.

Others are thinking about the same thing! According to our survey, the majority of first home buyers consider it very important or rather important that they have the possibility to live a rich life while repaying the loan and fulfil their dreams, such as travelling.

We agree. Always make sure the loan expenses leave space for other living, as well. Few of us want to sit in a fancy apartment without being able to afford anything else.

In addition to having the right amount of loan, it is good to understand that even though the interest rates are currently very low, a mortgage often spans many years, even decades. At some point during the repayment, the loan interest may take up a considerably higher monthly amount than right now.

In fact, it is often perceived difficult to assess the euro amounts of the expenses. As a general rule, you should be realistic when estimating your expenses. Find out what you spend money on, what expenses are necessary and important and how much you have remaining each month.

Well how can I fulfil my dreams if I own that home?
Especially now with low interest rates, it should also be possible to save for your dreams and future needs. If you have not yet started, try the following simple calculation and start saving immediately:

Calculate how much more the annual interest expenses of your current or future mortgage would be if the interest rate were to go up by 2 percentage points. For example, with a loan of  €100,000, an interest rate 2 percentage points higher would mean approximately €2,000 per year, or €166 monthly. Start by saving this!

The prices of residential property are in constant flux but one should not worry too much about the changes. The changes in prices will not become an issue until the moment when you are selling the home. The bank does not really monitor the price development of your specific home. If you keep repaying the loan according to agreement, you can continue living in your home regardless of market turbulences.

How will I know that the home I am buying will keep its value?
When you are buying a home, it is worth thinking about the future of the locality and region and get to know the housing company and the condition of the building. There are no universal answers to this question, but do contact us, and we will think about it together!

What if I have to sell the home for less than I bought it?
When you repay the loan, you are also protecting yourself against the possibility of decreasing prices. In other words, even if the price of the home went down a bit, you will not owe money as long as you get more for selling the home than you have remaining loan.

Example:
You buy a home for €150,000. After three years, you want to sell it, and the real-estate agent tells you that another flat in the region was just recently sold for €140,000. Because you have repaid €800 monthly for three years now, you have €28,800 less loan to pay off. (Also consider the expenses related to selling the home. For example, the real-estate agent’s fee can be approximately 3%.)

Right now the interest rates are exceptionally low. It really is possible that they will go up. Because a housing loan is repaid during several years or decades, the rates will have time to go up and down during the repayment period. This means that you should have the right amount of mortgage so that your economy can withstand even increased interest rates. We will take this into consideration when we grant the loan.

I have also heard about this interest protection. What is it and should I consider it?
Yes, there are different ways of protecting your loan, such as Interest Collar and a fixed interest rate. For example, with Interest Collar, the reference rate for your loan will not exceed the maximum collar level during the validity of the Interest Collar period, and you will benefit from lowered rates down to the minimum level. Does that sound difficult?

A fixed interest rate means that the interest rate of the loan is fixed for a certain period of time. The period can be, for example, 5 years. You will pay the same rate for the loan throughout the five-year period. You can benefit from a fixed rate if the interest rates in general rise above the collar agreed for you.

Example: 
Calculate how much more the annual interest expenses of your current or future mortgage would be if the interest rate were to go up by 2 percentage points. For example, with a loan of  €100,000, an interest rate 2 percentage points higher would mean approximately €2,000 per year, or €166 monthly.

Life can present many events, including unexpected twists. One has to live somewhere, and it may be easier to leave a home you own than one you rent.

You can rent out your home for a short or long period and then return back to an apartment that is yours. And in case you decide not to return, you can always sell the home.

Of course. In case you happen to also profit from it, you will have to pay 30% tax on the profit.*

It is a surprisingly common misunderstanding that if you sell your home before you have lived in it for two years, you would lose the full capital gain or have to pay 30% of the whole selling price. This is not the case. The tax only applies to the capital gain.

*The income tax rate for capital gain is 30%, and 34% for the part in excess of €30,000 euros. More detailed instructions on the taxation of capital gain is available on the website vero.fi.

In larger towns in particular, few of us have the possibility to immediately buy the home that we would spend the rest of our lives in. In practice, what happens is that you buy a home you can afford now and that suits your situation in life. When the time comes to change homes, you sell the current one and pay off the existing loan. Then, a new mortgage is negotiated for the new home. That is all there is to it.

We at the bank are accustomed to dealing with changing situations and are not afraid to talk about even difficult topics. So, do not dwell in your worries alone, but just contact us. For us, it is important that you cope even with difficult situations as well as possible.

Unlike with paying rent, the payment schedule for a housing loan is not carved in stone. If you have handled your finances well, your loan is flexible. Our home credits already contain free-of-charge instalment-free periods, which you can conveniently apply for in eBanking.

A loan that is suitable for your life also allows you to save money, allowing you to prepare for changing situations in advance.

When you own your home, your housing expenses are actually more flexible than if you were renting your home. In addition, the Steady and Steady Plus housing loans contain built-in flexibility options, such as instalment-free periods and loan changes without a separate service fee.

Read more about our housing loans

Example: 
In your own home, your housing expenses usually consist of the maintenance fee, the loan instalment and interest. For example, with a loan of €150,000, the instalment would amount to €536 monthly and the interest €188 per month.* If you become unemployed, you can apply for an instalment-free period, only paying the maintenance fee and interest for your housing. This will temporarily free up the amount of the instalment from your housing expenses and make it available to living. This is the period during which your loan will not be repaid. In addition, in case of prolonged unemployment you can also consider selling the home. If you were renting, you would have to pay the rent for the corresponding home in any case.

* The example is calculated with a loan of €150,000, a total interest rate of 1,5% and a loan term of 20 years. Source: Loan Calculator

Separation is something that may happen, and it can be a difficult situation also when it comes to the home and mortgage. Usually, the matters are sorted out by selling the home or with one of the partners staying in the home and redeeming the other partner’s share of it. You are best prepared for this situation when the loan amount is correctly dimensioned for your life and situation. This way, you will avoid situations where you have more loan than the home is worth.

In particular, if you take out a loan together and the amount exceeds what you would want to have alone, you should think about this possibility in advance. A commonly used way to prepare for the worst is insurance.

Read more about Loan Insurance, for example.