The housing market perked up at the end of last year after a long quiet period. In particular, first-time home buyers became more active, because the transfer tax exemption for first-time home buyers was removed at the turn of the year.

“First-time home buyers started several housing sales chains. Today, people prefer to buy a new dwelling only after they’ve sold the old one,” says Satu Astala, Managing Director for OP Koti Uusimaa.

“We received more mortgage appli­cations than normally at the end of the year. At the moment, people want to have the loan decision ready by the time they find a suitable dwel­ling,” says Riikka Kangas, Senior Vice President, Funding for Private ­Customers at OP Uusimaa.

A dwelling is the largest investment for most Finns. You should not let your emotions guide you when making the purchase decision and just buy the dwelling with the shiniest finishes. 

“Read the sales brochure and its ­appendices, such as the property manager’s certificate, carefully,” Satu Astala says.

You should look beneath the surface when buying a home, Satu Astala says.

Future repairs at the housing company have a direct effect on the housing costs, which is something you should remember when making the purchase decision. 

“Looking at the minutes of the board and annual general meetings is also important. Has the housing company decided to collect an additional charge to cover normal expenses? Are there any assessments of hidden defects in progress? For example, the need for a plumbing renovation can cause small symptoms well before it appears in the plans,” says Satu Astala.

At a viewing, it is OK to look under carpets and behind paintings.

“Buyers of a detached house should carry out a proper condition survey and measure the surface moistness in wet rooms to avoid hidden problems,” she adds.

Not everything can be seen in the plans. At a viewing, it is OK to look under carpets and behind paintings. When the previous owner’s furniture has been removed from the apartment, it usually looks more worn out than with the furniture.

“Redecoration is a one-off cost on top of the purchase price. You should take this into account in the mortgage application,” Riikka Kangas says.
OP grants renovation loan for redecoration.

An assessment of the suitable loan repayment amount starts with analysing your own expenses over the last couple of months. You should be able to save some money after paying the loan and normal living costs, such as bills, food and hobbies.

Riikka Kangas enjoys her family’s detached house in Veikkola. Her daughter’s school and varied jogging country are in the immediate vicinity.

“You should also have some room for manoeuvre in case the interest rates increase or you encounter an unpredicted change in expenses or income. For example, you can tie half of the loan to a fixed interest rate and half to a variable one, or secure half  of the loan against unemployment,” Kangas says and continues: 

“Do not tie all your funds to the walls around you, remember that life happens inside them.”

First-time house buyers must have at least five per cent of the apartment price as savings, other house buyers at least ten percent. When certain criteria are met, people without sufficient savings can buy the necessary additional security from the bank.

About one third of our housing loans are covered with the interest rate cap. Riikka Kangas, OP Koti Uusimaa

The average housing loan granted by OP Uusimaa is approximately EUR 200,000, Riikka Kangas estimates. The interest rate cap is a protective measure that ensures that the monthly repayment charge does not become too high even if the interest rates increase. 

The loan should be protected at the start of the loan period when it is at its largest.

“About one third of our housing loans are covered with the interest rate cap. We helped our customers save a total of about EUR 39 million in interest expenses last year,” Kangas says.

It is also important that home insurance remains in force uninter­rupted throughout the change of dwellings.

You should not rush into house buying.

“Before making the decision, sleep on it and think about your own housing needs,” Satu Astala says.

“You should spend time on comparing the different alternatives carefully,” Riikka Kangas advises.

“Sometimes, buyers who are looking for a detached house might end up choosing a block of flats,” Satu Astala.

“The living environment, services and transport connections must be optimal. You should think carefully about what is important to you in daily living and base your decision on that,” Riikka Kangas says.

When you find an interesting home, find answers to at least these questions

  • What do the sales price and the debt-free price mean? The buyer pays the sales price to the seller, and the debt-free price includes the apartment’s share of the housing company loan, which must be paid to the housing company in almost all new properties at the moment. Usually, people first pay only the interest on the housing company loan and start the repayments after 2–4 years.
  • Is the house located on its own plot or a rented plot? The plot rent may increase considerably after the rent period.
  • How much are the main­tenance charge, charge for financial costs, water rates and heating costs? In particular, the heating costs of a house with direct electric heating may be surprisingly high.
  • How much debt does the housing company have?
  • What renovations have been decided upon and how much do they cost?
  • What are the planned renovations like, i.e., what is the 10-year long-term renovation plan and cost estimate?

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