Guide to buying a home in Finland if you are an immigrant
Have you just moved to Finland? Do you intend to move soon? Or perhaps you’ve been living in Finland for a while, but haven’t bought a home of your own? This guide will tell you how to apply for a home loan and buy a home in Finland.
You can apply for a loan to buy a home, for example an apartment, a terraced house or a detached house.
Do you dream about building your own house? You can apply for a home construction loan to build your own home or holiday home, or a buy-to-let home.
You can apply for a loan to buy a holiday home or cabin.
If you save 10% of the price of a home in an ASP Account, you can apply for an ASP loan to buy your first home of your own. You can get a state interest subsidy and state guarantee for your ASP loan.
Are you dreaming about investing in a home to rent out? You can apply for a loan for buying a buy-to-let home.
If the home you hope to buy needs to be improved or renovated, you can apply for a loan to cover the costs – home improvement costs cannot be covered by a home loan.
What do I need before I apply for a home loan?
You might be able to get a home loan soon after moving to Finland, depending on your situation. You can apply for a home loan from your bank if you have the following.
You'll need a residence permit if you come to Finland from outside the EU. The permit must be valid for more than three months if you intend to apply for a loan. If you’re an EU citizen, you must register your right of residence in Finland.
You must register your Finnish address with the Digital and Population Data Services Agency (Finnish Digital Agency). The address must be for accommodation, not just a posting address.
To apply for this, register your personal details and address with the Finnish authorities. You can register at the service locations of the Finnish Digital Agency, at the Finnish Immigration Service or at a local tax office.
To apply for a home loan, you’ll need an online banking user ID or Mobile ID from OP or another Finnish bank.
If you are a US citizen or liable to pay taxes in another country, you’ll need a tax identification number (TIN), which defines your tax liability.
What do I need in order to get a home loan in Finland?
Regular income
You will need a regular source of income. In most cases, this means a monthly salary, but it’s also possible to get a home loan as an entrepreneur.
If you plan to move to Finland, or have just moved here, please add the following to your home loan application: employment contract, pay slips, and bank statements covering the last three months.
When granting a loan and accepting a guarantee or pledge, the bank uses personal credit information and customer data about the person making the commitment. Customer data is retrieved from the bank's internal sources and credit information from the credit information register of Suomen Asiakastieto Oy and from the positive credit register of the Finnish Tax Administration.
Collateral
You’ll need collateral to get a home loan. The home you intend to buy will be the primary collateral. However, in most cases this only amounts to 70 per cent of the collateral value, so you’ll also need savings or side collateral.
Savings
The maximum loan-to-value ratio and self-financed amount affect the size of home loan the bank can grant and how much savings you will need.
If you are a first-time buyer, you can get a loan for a maximum of 95 per cent of the fair value of the provided collateral. So, you will need at least five per cent of the home’s price as savings or other collateral.
If you own or have owned a home in another country, you are not a first-time buyer when you buy one in Finland, unless you owned less than 50% of the previous home.
If you are not a first-time buyer, you can get a loan for a maximum of 90 per cent of the fair value of the provided collateral. You will therefore need about 10 per cent of the home’s price in savings or other collateral.
Financial stability
Financial stability means keeping your income and expenditure in balance. You should be able to cover your expenditure without difficulty.
On the home loan form, we’ll ask you about your income and expenditure, your total assets and existing loans. We use this information to assess the size of loan you would be able to repay while still having enough money to live on.
Applying for a home loan
1. Use the home loan calculator to estimate the size of monthly instalments suitable for you
Before applying for a home loan, you can use the home loan calculator to check how the loan amount, repayment period and interest rate affect the monthly instalment. The loan amount is suitable if you have enough money to live on and save after paying each monthly instalment.
2. Make a home loan application online
Complete the home loan application online on the op.fi service.
To apply for a home loan, you’ll need an online banking user ID or Mobile ID from OP or another Finnish bank.
You can apply for a loan by yourself, or together with another person. Start by filling in the home loan application online. We’ll send your co-applicant a message, so that they can consent to the joint application and add their personal data. Then, as the person who started the application, you can finalise and send it.
It’s worth applying for a home loan as soon as you plan to buy a new home. Applying doesn’t commit you taking out the loan – once you have a loan offer, you can focus on finding your dream home.
However, when filling in the home loan application, you should have an idea of what kind of home would suit you: the home type and location, and an estimate of how much space you would like.
What’s the difference between types of home?
If you buy a home in a housing company, such as an apartment or terraced house, you are buying shares giving you the right to occupy a home. The housing company owns the actual buildings.
The housing company’s Articles of Association divide responsibility for maintenance, repairs and renovation between the shareholders and housing company. You should carefully read the housing company’s documents (property manager's certificate, housing company’s Articles of Association and financial statements).
When you buy real estate (property), you’re actually buying a house or building, such as a detached house, and some land.
The owner (you) will be responsible for maintaining and repairing the property. So, when buying real estate it's worth ordering a condition assessment and asking the seller for the property’s key details: an extract from the real estate register, a certificate of registration of title, an abstract of title, and building permit documentation.
If you are from outside the EU and EEA, you’ll need a real-estate purchase permit from the Ministry of Defence.
Before applying for a home construction loan, you must get a construction cost estimate from a professional. The cost estimate should be as realistic as possible, to ensure that it covers everything and takes account of possible additional costs.
The construction project’s price can include permit and construction management, excavation and foundation costs, a modular home, surface materials, and building services engineering and yard solutions. You can also apply for a construction loan to buy a plot of land.
A right-of-occupancy home combines renting and home ownership. When buying a right-of-occupancy home, you buy the right to live in a home owned by a construction company. You do not get ownership of the home.
You make a right-of-occupancy payment of 15 per cent of the home’s price when you move in, after which you pay a monthly residence charge. The right-of-occupancy corporation is responsible for maintaining the building.
3. You’ll get a preliminary home loan offer
When we have received your home loan application, we’ll contact you and agree a loan negotiation time.
If all goes well, you may even get a preliminary loan offer before we contact you. The offer would be based on the income and expenses information you provided on the application and the maximum loan amount calculated on its basis.
In the loan negotiation, we’ll discuss your situation and try to find the best loan solution for you. We’ll also agree on the details of the loan and on collateral.
Proof of source of funds
At the loan negotiation, we may ask you about the source of the funds used to buy the home. This is a legal requirement: the bank must know all its customers and verify their identity.
You must provide a written clarification of where the money used to buy the home will come from. In addition, attach a document such as a deed of sale, estate inventory or other source-of-funds document to the clarification. Attachments must be in Finnish, Swedish or English.
The bank cannot make you a binding loan offer until you have provided sufficient source of funds information, which it has approved.
The loan negotiation can be in Finnish, Swedish or English. If you need an interpreter, you must hire one yourself and book an appointment for the loan negotiation at the bank branch.
4. Your offer to buy the home should be conditional
If you have a preliminary home loan offer, you can go to home viewings and make an offer when you find a suitable home. Your offer to buy the home should be conditional, because our loan offer will be preliminary until your loan collateral is approved by the bank.
When you have found a suitable home and the seller accepts your offer, it’s time to actually buy the home. This is usually done digitally or at an agreed time at the buyer’s bank.
A home loan suitable for you
In the loan negotiation, we’ll agree on the repayment of your home loan (for example, the interest and repayment method).
Home loan’s interest rate
A home loan's interest rate consists of a reference interest rate, such as the Euribor or OP-Prime, and the bank’s margin. You can also get a fixed interest rate for your home loan.
Home loan repayment holiday
Select the home loan repayment method that best suits your needs. The most popular repayment method is a variable annuity, but you can also choose equal payment or equal amortisation.
Protect your home loan
Your life or the world around us can change in an instant. To secure your finances and ability to repay your loan, you can buy products such as interest rate protection or loan protection insurance.
Home loan repayment
If your life changes, you can apply for a repayment holiday, or a change in your loan’s repayment scheme. Alternatively, you can repay your loan early by making extra repayments or prepayments.
Owner-customers get OP bonuses on home loans
As an OP cooperative bank owner-customer, you own part of your local bank. This means that you’ll earn OP bonuses on your home loan. Earned OP bonuses are used to cover charges and fees related to personal banking and insurance services. You’ll also pay less for banking, insurance, and savings and investment services. To become an owner-customer, simply pay the member cooperative contribution.
Don’t forget home insurance
Home insurance will cover you if your home is damaged. There’s no need to look for another insurance provider – insure your home with us.
Home loan is a one-off loan. Let's look at a home loan where the loan amount is 170,000 euros. The loan term is 20 years. The loan margin is 0.7%. Calculating with the 12-month Euribor of 2.448% (valid on 3 January 2025), the annual percentage rate of charge of this home loan will be 3.3%. In addition, a loan servicing fee of 2.50 euros will be charged each month. When the loan is drawn down, a one-off origination fee of 680 euros will be charged. The estimated total cost of the loan is 231,151.05 euros.
In this calculation, we assumed that the entire loan was drawn down at once, that the loan interest rate, fees and charges stay the same throughout the loan term and that the loan is repaid in equal payments of 959.31 euros every month. The home loan is granted by an OP cooperative bank.
The estimate calculation is indicative only. The loan term, loan amount and interest rate used in the calculation represent a typical loan issued by an OP cooperative bank.
The home loan and the owner-customer membership are granted by an OP cooperative bank.The insurance is issued by Pohjola Insurance Ltd.