Home loan

You can use a home loan to buy, build or renovate your home or summer cottage. In cooperation with KredEx, we offer young families and specialists, tenants living in restituted housing, veterans of the Defence Forces or Defence League and a person who acquires energy-efficient housing or converts their existing housing into energy-efficient housing a home loan with KredEx guarantee.

  • Amount: from €3,500
  • Term: up to 30 years
  • Interest rate: 6 month or 12 month Euribor + margin
  • Collateral: a mortgage established on the property in favour of the bank

What we can do for you?

Call us at 6 800 800 or contact your Private Banker.
Let's discuss your needs and find the best solution for you.

More about home loan

  • Loan amount
    The minimal amount of a home loan we issue is 3,500 euros. The maximum loan amount depends on the income of the applicant/co-applicant, collateral and self-financing.
  • Interest rate and term

    Loan interest rates are determined on an individual basis. The interest rate consists of the bank's interest margin and the inter-bank floating (variable) or fixed interest rate.

    You can choose a variable rate or a fixed rate loan:

    • If you choose a variable interest rate, it will change every 6, 12 months throughout the term of the loan agreement depending on changes to the selected inter-bank interest rate – EURIBOR.
    • If you choose a fixed interest rate, it will be fixed for all term of the loan. You will be guaranteed that your monthly payments will not change.

    The term of the loan may never exceed 30 years.


  • Self-financing
    • From 30% of the market value of collateral in the case of an apartment or house up to two years old.
    • From 34% of the market value of collateral in the case of an older apartment or house.
    • Self-financing from 0% is possible if additional collateral if provided.
    • From 10% of the market value of collateral in the case of a guarantee from KredEx.
  • Collateral
    We accept a mortgage established on residential property located in the Republic of Estonia as collateral. In general, the property that is purchased, renovated or built for the loan is the collateral, but other property may also be offered as collateral or additional collateral.
  • Loan repayment

    You can repay a loan by the:

    • Linear method – the loan is repaid in equal parts and interest is calculated on the remaining loan balance, thus repayments to the bank gradually decrease each month
    • Annuity method – equal amounts are repaid each month consisting of loan repayments and monthly interest

  • Early repayment of the loan
    • In order to repay the loan early, the borrower must submit a written application at least three banking days before the requested repayment.
    • In the event of early repayment, the borrower must pay the early repayment fee, which is subject to payment on the date of early repayment.
    • If the loan interest is linked to 6 or 12 month EURIBOR, the amount of the early repayment fee equals the sum of interest due for the next 3 months.
  • Settlement obligation
    In the case of loan agreements, the standard terms and conditions of which include the obligation of a borrower or co-borrower to conduct their transactions via a current account in Danske Bank, the Bank does not consider the failure to perform this obligation a breach of the agreement. This means that the current account tied with the agreement must have sufficient available funds on the repayment date to fulfil the obligations set out in the loan agreement, while the borrower can perform other transactions in any other credit institution.

How to apply

  • Required documents

    Home loan:

    • Loan application
    • Identity document
    • If your salary has not been paid to an account in Danske Bank in the last 6 months, an account statement for the last 6 months from your bank as well as employment, service or other contracts if necessary
    • Documents evidencing other income, such as rent or lease contracts, documents evidencing business income or owner’s income
    • Property valuation report submitted by a valuator acceptable to the bank

    If you would like to borrow money for building, renovation or reconstruction, we also need the following documents:

    • Documents evidencing ownership rights to land or right to long-term lease (if a house is built or reconstructed)
    • Construction or reconstruction permit
    • A calculation of how the loan amount will be used, e.g. a price quote from the builder

    Documents related to collateral:

    • Documents that prove ownership
    • Valuation report from a real estate agency accepted by the bank
    • Copies of rent, lease and other contracts encumbering the collateral

    The bank has the right to demand additional documents if necessary.


  • A home loan with KredEx guarantee

    In cooperation with KredEx, we offer home loans with additional collateral, which broadens the opportunities of applying for a loan.

    The following persons can apply for a loan with KredEx guarantee:

    • Young families: parent or parents raising a child aged 15 or under. Adoptive parents or guardians are also regarded as parents.
    • Young specialist: a person aged 35 or under who has acquired secondary specialised or secondary vocational education, who has an effective employment or service contract and who has completed their probationary period.
    • Tenants in living in restituted housing.
    • Veteran of the Defence Forces or Defence League: a person who has served in the Defence Forces or Defence League, has been on a foreign mission or sustained an injury when serving in Estonia.
    • A person who acquires energy-efficient housing or converts existing housing into energy-efficient housing: a person who acquires or builds an energy-efficient residential building or reconstructs a residential building or part of it so it becomes energy-efficient.

    It is possible to apply for the loan with a co-applicant, who can be a person from the same household, usually the spouse or partner. In this case, at least one of the borrowers must comply with the conditions set for the target group pf KredEx. Documents evidencing that the person belongs to the target group must be submitted.

    KredEx guarantee makes the loan more affordable, because it guarantees part of the self-financing (the difference between the ordinarily required 34% and the 10% required in the case of the KredEx guarantee, 20,000 euros maximum, or 50,000 euros maximum in the case of the target group of people acquiring energy-efficient housing).


  • Property valuation

    The evaluation act of a property valuator accepted by the bank must be submitted about the property offered as collateral to the loan.

    The list of our accepted cooperation partners is the following:

    Partner

    Location

     1Partner Kinnisvara Tallinn OÜ Tallinn
     Aarete KV OÜ Haapsalu
     Arco Vara Kinnisvarabüroo AS Tallinn, Tartu, Pärnu, Narva, Rakvere, Jõhvi, Kuressaare, Otepää, Haapsalu, Paide, Viljandi
     Colliers International Advisors OÜ Tallinn and Harju county, Tartu, Pärnu, Narva, Rakvere
     Domus Kinnisvara OÜ Tallinn, Tartu, Pärnu, Viljandi, Narva, Võru, Kuressaare
     ERI Kinnisvara OÜ Tallinn (Tallinn-Harju county-Rapla), Tartu (South-Estonia -Jõgeva-Viljandi)
     Kaanon Kinnisvara AS Tallinn, Tartu
     Kinnisvaraekspert OÜ Tallinn, Tartu, Pärnu, Rakvere
     LVM Kinnisvara OÜ Harju county, Tartu county, Pärnu county, Saare county, Hiiu county, Muhu county
     OÜ Kinnisvarabüroo Uus Maa  Tallinn, Tartu, Pärnu, Rakvere, Jõhvi, Viljandi, Jõgeva, Kuressaare
     OÜ LAHE Kinnisvara Valdused Tallinn, Tartu, Viljandi, Pärnu
     Ober-Haus Hindamisteenuste OÜ Tallinn, Tartu, Pärnu, Narva, Jõhvi
     Pindi Kinnisvara OÜ Tallinn, Tartu, Pärnu, Narva, Rakvere, Rapla, Paide, Haapsalu, Valga,
     Võru, Viljandi, Põlva, Kuressaare, Jõgeva, Jõhvi, Türi, Tapa, Kärdla
     Prisma Kinnisvarade OÜ Tallinn
     RE Kinnisvara AS Tallinn
     Seven Kinnisvarakonsultandid OÜ Tallinn
     Tõnisson Invest OÜ Pärnu, Lääne county

  • Property insurance

    The property serving as loan collateral (except for land) must be insured in favour of Danske Bank for the entire loan period.

    Request an insurance quote from the property insurance companies accepted by us:

     If P&C Insurance AS
     AAS "BTA Baltic Insurance Company" Eesti filiaal
     Ergo Insurance SE
     Swedbank Varakindlustus AS
     Inges Kindlustus AS
     AB „Lietuvos draudimas“ Eesti filiaal (PZU)
     Gjensidige Baltic Eesti filiaal (former Parex Kindlustuse Eesti AS)
     Salva Kindlustus AS
     Seesam Insurance AS
     Compensa Vienna Insurance Group, UADB Eesti filiaal

  • Possible additional expenses
    • Notary’s fee and state fee for the preparation of notarised contracts.
    • Expenses related to the valuation of the collateral. The borrower must order the necessary valuation report at their own expense from a property valuator accepted by Danske Bank.
    • Collateral insurance premiums. Insuring the collateral when a loan is taken is mandatory and insurance cover must be in force for the duration of the entire loan period.
    • Loan repayment conversion expenses. If there are no funds in the currency of the loan in the current account used to service the loan on the repayment date specified in the agreement, the bank has the right to convert funds in any other currency using the selling rate of transferred money valid in the bank’s foreign exchange.

  • Examples of annual percentage rates of charge

    There are various expenses related to borrowing and loans themselves, such as such as interest, credit fee, monthly maintenance fee to the card tied to the loan, etc. The annual percentage rate (APR) of charge can be calculated for every loan on the basis of these expenses. Basically, the APR is the amount of the expenses arising from the loan in a year.

    The sample APR of the loans offered by Danske Bank are given below.

    Home loan

    The initial APR is 1.83% per year on the following sample conditions:
    credit amount €50,000, interest 1.75% per year (6 month EURIBOR + 1.75%; calculated on 6 month EURIBOR as at 10.03.2016, which was -0.139% and is deemed to be 0 (zero), unfixed interest), contract fee €250, term 25 years, total amount €62,201.35, monthly repayment €206,52. The rate is calculated on the assumption that the credit amount will be immediately drawn down in full and the principal is repaid and interest is paid in monthly annuity payments. Collateral must be inured for the entire period of the loan.

    Overdraft

    The APR is 26.94% per year on the following sample conditions:
    credit limit €700, interest rate 18%, contract fee €20, current account management fee €1.50 per month, repayment term 1 year, total amount €865.75. The rate is calculated on the assumption that the credit amount will be immediately drawn down in full.

    MasterCard Platinum

    The APR is 7.70% per year on the following sample conditions:
    credit limit €1,000, annual fee €50, contract fee €10, current account management fee €1.50 per month, total amount €1,081. The rate is calculated on the assumption that the credit amount will be immediately drawn down in full.

    Student loan

    The initial APR is 5.45% per year on the following sample conditions:
    credit amount €1,920.00, interest rate 5%, contract fee €2.56, total amount €1,975.89. The rate was calculated on the assumption that the loan amount will be immediately drawn down in full and repaid within a year in 12 equal instalments after equal intervals of time.

    Car leasing

    The initial APR is 2.72% per year on the following sample conditions:
    capital lease, price of property €19,000 incl. VAT, down payment 20%, residual value of property at end of period 0%, contract period 5 years, interest rate 2.0% (6 months EURIBOR + 2.00% per year; the calculation is based on 6 months EURIBOR as at 01.02.2017, which was 0.244% and is deemed to be 0 (zero); unfixed interest rate), contract fee €175; current account management fee €1.50 per month, total amount €16,260.49, monthly repayment €266.42. The property must be inured for the entire period of the loan.


Disclosure

Please note that every loan is a financial obligation and any failure to perform the obligations arising from the loan agreement may have serious consequences (e.g. compulsory sale of property).

Consider your possibilities and needs carefully before you sign the loan agreement. Read the terms and conditions of the loan and request information from your relationship manager if necessary.


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