Coop Pank makes housing loans even more accessible for teachers

A year ago, the domestic Coop Pank began offering teachers housing loans on preferential terms, resulting in every tenth housing loan issued by the bank last year being granted to education professionals. This year, the bank is making housing loans for teachers even more accessible.

While last year the interest rate on housing loans for teachers at Coop Pank started at 1.60%, this year for new housing loans for teachers it will be 1.49% plus a six-month Euribor. In addition to a lower margin, the bank exempts teachers from the fee for concluding a loan agreement and covers up to €100 for home insurance issued through Coop Kindlustusmaakler during the first year of the loan. After issuing the loan, the bank also reimburses the teacher for property appraisal costs and offers a free payment package for one year.

Karin Ossipova, Head of Housing Loans at Coop Pank, noted that teachers have responded positively to the bank’s offer and have been actively applying for loans: “Last year, every tenth new housing loan agreement at Coop Pank was concluded with a teacher from a comprehensive school or kindergarten.”

Housing loans for teachers were issued in all counties, with the majority (42%) of agreements made with teachers in Tallinn and Harju County. In Tartu and Tartu County, 18% of all teacher housing loan agreements were concluded.

The average loan amount last year was €94,000, with a loan term of 19 years. In Harju County, the average loan amounted to €130,000, while in Ida-Viru County it was €33,000. According to Ossipova, the average loan amounts in different regions correlate with local property price levels.

Last year, 23% of teachers also utilized guarantees from the Estonian Business and Innovation Agency (EIS) when purchasing housing, including guarantees for rural housing loans. EIS guarantees are intended for those seeking loans to purchase new housing or renovate existing homes, reducing the burden of the initial down payment. The rural housing loan guarantee allows for the purchase or renovation of homes outside major population centres.

Karin Ossipova emphasized that the goal of the bank’s special terms is to simplify the process of buying a home for teachers as much as possible. “Last year was undoubtedly challenging for teachers, and negotiations over working conditions did not yield the expected results. The issue of teacher workload and income corresponding to their role remains a pressing concern for society. As a bank, we cannot eliminate the disparity between the workload, responsibility, and remuneration of educators, but we can help them achieve the dream of a home they deserve,” Ossipova explained, highlighting the bank’s decision to continue offering favourable housing loans for education professionals this year.

All kindergarten and comprehensive school teachers, including teaching assistants, support specialists, teacher aides, school psychologists, special education teachers, social educators, learning consultants, deputy principals, and heads of educational institutions, can apply for a housing loan for teachers at Coop Pank. The loan can be used to purchase, build or renovate a home, as well as to refinance an existing housing loan.

A teacher can act as both the primary applicant or a co-borrower, and the housing loan can be combined with EIS guarantees, significantly reducing the need for self-financing. “The most popular guarantees include those for young specialists, young families, and families with several children. Teachers living farther from major centres can also use the EIS guarantee for rural housing buyers and the co-financing loan offered by the Rural Development Foundation (MES) to reduce self-financing requirements,” added Ossipova.