Coop Pank started offering the possibility of fixing the interest rates on home loans

According to Karin Ossipova, head of private client real estate financing at Coop Pank, fixing the interest rate gives home loan holders the confidence that the loan payment will remain the same for a set period of time, regardless of a possible increase in the base interest rate, that is in Euribor.

“Home loan interest usually consists of an interest margin and a six-month Euribor, which means that every six months the interest rate can change and affect the size of the loan payment. For example, in the case of a loan of 100,000 euros for 30 years, an increase in Euribor by 1.00% will mean an increase in the monthly loan payment by almost 50 euros,” Ossipova explained.

Interest can be fixed for both existing and new home loans. When the interest rate is fixed, an interest rate fixing margin is added to the regular home loan interest rate, i.e. to the risk margin. After the end of the fixed interest period, the regular interest rate is again applied to the contract, that is a six-month Euribor plus the risk margin.

To fix the interest on a home loan, you should contact your loan administrator, who will explain the conditions for fixing the interest and the related costs. When fixing the interest rate of the current agreement, the bank charges a fee for changing the agreement. It should also be taken into account that early repayment of a loan in a period with a fixed interest rate is priced differently than in a period with a floating interest rate.

Coop Pank, based on the Estonian capital, is one of the five universal banks operating in Estonia. The number of clients using Coop Pank for their daily banking is 128 300. Coop Pank aims to put the synergy generated by the interaction of retail business and banking to good use and to bring everyday banking services closer to people’s homes. The strategic shareholder of the bank is the domestic retail chain Coop Eesti comprising 330 stores.