Buying real estate with a mortgage is a common practice in Estonia. However, to successfully obtain a mortgage, several key aspects must be considered.

Down payment and state support:
Most banks require a 15% down payment of the property price. However, some groups of people can access state support through the Fond Kindlustus (formerly KredEx), which allows them to reduce the down payment to 10%.

Bank requirements for the borrower:
Banks assess the borrower’s ability to repay based on:

• Income level – Usually, a certificate of income for the last 6 months is required. Some banks take the average salary, while others may use the most recent salary if it’s stated in the official employment contract.
• Credit history – No overdue payments on previous loans significantly increase the chances of approval.
• Property appraisal – The bank will require an independent appraiser’s conclusion on the market value of the property.

What is Euribor and the bank’s margin?
Estonian banks issue mortgage loans with a floating interest rate, which consists of:

• 6-month Euribor – Recalculated every six months and may change depending on the market situation.
• Bank margin – In most banks, it starts from 1.59%, but this is individual.

To get the most favorable terms, it is recommended to approach several banks, compare offers, and inform each of them about the competitors’ terms, as this often results in better conditions.