Home loan

It is possible to apply for the loan when the remaining income after paying daily expenses is sufficient to cover the loan payments. If you have taken a loan from a financial institution before, you should not have had any problems with its repayments.

A home loan helps to finance the purchase or renovation of a home.

The loan application is available on the website of LHV. If your salary is currently not being deposited in LHV Pank, please send an account statement for the past 6 months’ to the address kodulaen@lhv.ee (digitally signed).

The apartment or house you are planning to purchase can be used as collateral. Self-financing can be replaced with additional collateral, which can be another property belonging to you or another person that is in a good condition. Real estate in good condition and in Tallinn, Tartu or the vicinity of either city is preferred.

It depends on your creditworthiness as the loan applicant. We analyse the repayments of your earlier loans and home loan collaterals and calculate a loan sum that you would be able to pay back.

The repayments of loans and leases may amount to up to 50% of your income, but the rate also depends on the number of dependents you have. We will apply a 6% interest on the monthly payments, based on the regulation of Eesti Pank.

You can use the following tool to calculate the biggest possible loan sum you can possibly take.

You can choose between an annuity schedule and a schedule with equal payments of the loan principal.

In the case of an annuity schedule, the loan payment for each month remains fixed until the end of the loan period. At the beginning of the loan period, it is mainly comprised of the interest, but with each consecutive instalment, the share of the principal increases. The interest is calculated on the outstanding loan balance.

In case of a schedule with equal payments of the loan principal, the principal is divided into equal parts, to which the interest is added. As the interest is calculated on the outstanding loan balance, your instalments will decrease with each subsequent month.

So, in case of an annuity schedule the payments are equal throughout the whole loan period, resulting in a larger total interest sum. With a schedule with fixed payments of the loan principal, the instalments are bigger at the beginning of the loan period, but are constantly decreasing and the total interest paid will be smaller.

The self-financing rate depends on the condition of the property to be purchased. When the property is new and in a very good condition, the self-financing rate is at least 15% and in case of older real estate at least 20%. The precise sum of the required self-financing depends on the condition and location of the collateral and your solvency.

If you want to, you can replace the self-financing with additional collateral. This can be another property belonging to you or another person that is in good condition. Real estate in good condition and in Tallinn, Tartu or the vicinity of either city is preferred.

In case of a construction plan, we will take into account the total cost of the project. The self-financing is always paid first, and then the building must be completed with the help of the home loan. When you want a loan offer for the construction of a house, please send the construction plan, the construction budget and the construction permit to the address kodulaen@lhv.ee. In addition, please include the valuation report of the house to be built, which establishes both the present as well as the potential future market value.

When planning to take a home loan, please remember that you need to pay the self-financing sum, agreement fee and the fee for the appraisal of the property.

When a collateral agreement is concluded, a notary fee and state fee also apply. These sums depend on the substance of the transaction and the amounts of the loan and mortgage. The notary fee can be calculated with the following tool: notarnet.ee/kalkulaator.

As real estate that is collateral for a loan must be insured for the entire loan period, also take into account the insurance costs.

Yes. If you are applying for a home loan and are not yet a client of LHV, you must first conclude a client agreement at our office.

You can choose the date of the loan payments yourself when filing the loan application. On the basis of the loan application we will compile a loan schedule including all the repayment dates and sums.

It is your responsibility to make sure that you have the required sum available on your LHV Pank account on the date of each payments. It is debited from your account automatically without a separate invoice.

Yes, it is possible. If you want to return the whole loan sum or a part of it prematurely, it can be done free of charge at LHV Pank. To do so, send an e-mail to your loan administrator.

In order to end the loan agreement prematurely, you need to transfer, by the agreed date, an amount which covers the interest accumulated to date and the unpaid principal sum to the account at LHV Pank which is linked to the loan.

Just like you, it is also in the interests of us as the bank that should the collateral property be damaged, the insurance would compensate the damages.

When concluding the insurance contract, make sure that all of the most common risks are covered. Coverage of risks related to fire, water, natural disasters and acts of vandalism are required in all cases.

The collateral property must be insured for the duration of the loan period. Please state LHV Pank as the beneficiary.

Preferred collateral is an apartment or private residence in Tallinn, Tartu or the vicinity of either city. The collateral does not need to be your place of residence. The property to be purchased can also be used as the collateral.

The acceptance rate of collateral may be up to 85% of the market value. The acceptance rate depends on the location of the collateral, the type of the collateral and its condition.

If you need a grace period, please contact your loan administrator and let them know.

For you, a mortgage means that if the loan is not repaid, the bank will be entitled to sell the apartment or house (including the land) owned by you.

Before you consent to the establishment of a mortgage:

• consider carefully whether you are prepared to risk and give up an apartment or house owned by you if there are any problems with the repayment of the loan.
• decide whose and what obligations you are prepared to guarantee.
• you are entitled to request, from both the notary and the bank, drafts of the contracts to be concluded and, once you have received them, review their content carefully.
• do not be afraid to contact the bank or the notary’s office to find answers to any questions that have come up.

Use legal assistance, if needed.

When you are about to sign a notarised contract:

• listen to the notary’s explanations very carefully.
• do not be afraid to ask if something remains unclear.
• double-check that the contract states specifically what you have agreed upon with both the borrower and the bank.

Once contracts have been signed:

• be proactive and take an interest in how the performance of the loan contract is proceeding.

If the borrower does not reply to your questions, make sure to contact the bank.

• always communicate any changes in your contact details (address, telephone number, and e-mail address). Only in this way can you be certain that the necessary information will reach you.
• carefully review any notices sent by the bank and make sure to collect any registered letters.

If the borrower is not performing their obligations, the bank will contact you and provide you with an opportunity to perform the obligation.

By performing the borrower’s obligation, you can prevent the sale of the pledged apartment or house as well as avoid incurring any additional costs or litigation.

You are entitled to require the borrower to indemnify any amounts you have paid on their behalf.