Notably, the 12-month euribor has turned higher than shorter periods. My loan will complete one year this month and the euribor will update. Well, as a first-time homebuyer, I didn’t even know that changing the euribor costs 400(!!) euros at my current bank if I were to switch to another one
Still, even though the sum is so high, I wonder if it would still pay for itself in the long run if I were to switch it to either a 3 or 6-month euribor
But the cost of switching is quite high compared to other banks where, at a quick glance, it’s in the range of 100-200€…
Normally, the 3-month Euribor should indeed be lower than the 12-month. So now we are returning from an exceptional situation to a “healthy” situation. Attached is the history of Euribor rates in a graph.
The shorter the interest rate, the more affordable it should be, as the borrower exposes themselves to a greater interest rate risk with a more frequent interest rate review period.
Yeah, that’s really a pain in the ass when I, completely unaware, took out my first mortgage, and they just pushed the 12-month Euribor directly on me without asking any further questions, and there was no mention that changing it later would cost something… Only later did I start to realize that the shorter the period, the better, at least currently. Of course, if it seems that interest rates are on a longer-term rise, then a longer period is better.
Yep, and the same applies from the perspective of the bank’s business risks: The more frequently a customer’s loan interest rate is “adjusted”, the lower the lender’s risk → in normal situations, short-term rates have a lower interest rate.
An inverted yield curve is a traditional and predictive recession indicator, which is partly why I am a bit cautious and maintain a cash position.
Now that the latest interest rate adjustment came for the 3-month Euribor, I was able to run the numbers through the calculator. I saved €398 by switching from the 12-month Euribor last summer. It really helped that I was able to negotiate a good discount on the switching fee. Every little bit helps…
I must also add that this is even more ridiculous when the bank’s message states that changing the Euribor costs 400e/loan. And since we have 2 loans for our apartment through the ASP loan, well, I’m definitely not going to start changing them. But such a thing should have been clearly brought up when taking out the loan, and not just directly put 12-month Euribor on the paper, saying ‘here you go and sign the papers’
And in addition, because of the ASP loan, as there are indeed 2 loans, and the loan payment transfer is 3.90€/loan just for the money moving from one place to another, many things eat away at the benefits of that ASP… But then if we hadn’t taken the ASP loan, we wouldn’t have even gotten an apartment with our income
Indeed, when agreeing on a loan, the reference rate is also agreed upon. At some point, banks did not offer anything other than the 12-month Euribor as a reference rate, and at some point, other options were only offered upon specific request. In recent years, it has also become common for banks to price the margin differently for different reference rates. That is, the margin for the 12-month Euribor is smaller than, for example, the margin for the 3-month Euribor.
400 euros is certainly a hefty cost for changing the reference rate, when six months ago the largest banks communicated the cost to be in the range of 100-300 euros:
But that’s why the reasonableness of the loan terms should be weighed already when making the loan agreement.
Yeah, well, when taking out that first loan, I didn’t really even know what all things needed to be clearly gone through and what I should even suggest/ask myself. At that stage, I at least managed to shop around for banks and eventually got a smaller margin, which I’m quite happy with, especially since I just read a newspaper article about how margins have decreased and what they are on average currently. From what I also saw, that fee is generally around €200 with other banks, so that €400 per loan (i.e., €800 in my case) is indeed quite a rip-off…
Phew, that was quite a process, but now the apartment is finally sold It took just about 1 year, as it was far from everything, i.e., in the “center” of Finland’s second largest city In the end, even the bank caused a bit of hassle with slow paperwork.
The price was very fair to the buyer (well below the initial price), so let’s wish the young couple good luck
The bridge loan was also expiring in just over a month Based on this, I definitely don’t recommend using one, even if an apartment might then pass you by.
Any recent experiences with fixed interest rates, interest rate collars, or interest rate caps? I’d be interested to know how much prices have come down now with the decrease in long and short-term interest rates.
Practically every time I’ve asked the bank for a fixed interest rate, they have offered something very close to the swap rate + my own mortgage margin.
Intending to buy a shared home, and the following banks have been benchmarked:
OP: Margin 0.40%, arrangement fee €100
Nordea: Margin 0.35%, arrangement fee €0
S-Pankki: Margin 0.65%, arrangement fee €3000 → €1500
Danske: Margin 0.40%, arrangement fee €0
Aktia: Margin 0.30%, arrangement fee €200. This margin requires investing €600/month in funds, at least initially. Continued investment is not monitored. If investing €400/month, the margin is 0.35%
The best mortgage offer has been surveyed in Turku. Loan amount approximately 380k, two applicants with permanent jobs and collateral in order. Both are currently Osuuspankki customers. How much weight should be given to Osuuspankki’s bonuses? Aktia’s margin is clearly the lowest, and the loan term could be extended up to 30 years. The loan amount differs slightly between banks because a decision on a specific property has not yet been made, whether to include transfer tax in the loan, and whether the property is a terraced house, semi-detached house, or detached house. I would also gladly receive pros/cons for these options.
Our current owner-occupied home is intended to be rented out, and this is possible with all banks as long as the collateral is in order.
It’s quite customer-specific. Competing banks might have some loan management fees and some might even have monthly account fees, which can be offset with OP bonuses. These can at least be counted as benefits. Then, if you use Pohjola insurance policies, which can be paid with bonuses, these can be counted as benefits with a certain multiplier, with the idea that, on the other hand, you might get the same insurance policies cheaper if paid with money.
Since both the loan amount and the loan term seem to be pushed to their limits, it is likely an annuity loan. How have you prepared for a possible (or, over that review period, even highly probable) rise in interest rates? If the monthly installment rises to, say, €2000, is that just noise?
As such, the margin offers you received are, in my opinion, quite, if not very, acceptable. The collateral must therefore truly be in order. It would also be advisable to consider which Euribor rate you want to tie your loan to, as that can also affect both the repayment period and the margin. And of course, a loan has many other costs besides the margin; for example, I didn’t notice any monthly payment fee in your calculation.
With OP bonuses, you practically get free home insurance and part of your car insurance payment covered. They can also be used for legal services, among other things, if needed. Their effect currently seems to be about 0.35% if I remember correctly, so if you take out insurance from Pohjola, there is indeed an advantage to that.
With a loan of that size, I would also invest in proper (couple’s) life insurance and clarify matters completely with the future(?) spouse in case of a possible separation, in writing, of course.
I would personally choose Nordea, small margin, no fees, and if I recall correctly, 10% repayment flexibility on the entire loan amount. I personally skip repayments for some months if and when I want to put money into, for example, investments, or essentially, you don’t need a cash buffer as you can skip a repayment for a month if needed…
Thanks for the reply. The loan amount and length are not yet at the pain threshold. All of these are annuity loans, and we have not yet made a decision on interest rate hedges. A monthly installment of 2000€ does not yet cause problems when net income is 6600€. The loan length is longer to allow for flexibility and the possibility to invest. We will likely choose a 3-month margin, but no decision has been made yet. Monthly fees in all banks are about 2.5€, so there are no differences there. I currently have my insurances with Pohjola, but there has been talk for a while about whether Osuuspankki’s bonuses will be taxed/expire. A joint life insurance policy will also likely be taken out.
With OP bonuses, you practically get free home insurance and part of your car insurance premium covered. They can also be used for legal services, for example, if needed. Their effect seems to be currently about 0.35% if I remember correctly, so if you take out insurance from Pohjola, there is certainly an advantage.
In this regard, it’s worth noting the government’s decision made in the autumn of 2024: “Starting from the beginning of 2026, capital gains tax must be paid on bonuses if they have been earned from banking services but are used to pay for insurance.”
OP has announced that the benefit received from bonuses would not diminish due to this, meaning they are making changes to the system. One option that has also been hinted at is paying interest with bonuses, but that would, at least in my opinion, be too good to be true.
I’ve been under the same impression, that is, the benefit will remain roughly the same size even if its earning principle changes. The cooperative must have some kind of profit distribution system in any case, regardless of the name.
Edit: Right, there might be a decrease if the current +40% bonus campaign ever ends. This at least seems to be a temporary campaign, who knows what they have planned.
It took just about 1 year, as it was far from everything, i.e., in the “center” of Finland’s second largest city 
In the end, even the bank caused a bit of hassle with slow paperwork.
Based on this, I definitely don’t recommend using one, even if an apartment might then pass you by.