Should I buy an apartment in Finland?

[lkpro91]

Hi guys,

My gf and I are not from Finland, but we just received our degrees here and have been working in Helsinki area for a while.
We will have to move out of the current student apartment within couples of months, so now is time for us to start finding a new apartment. Besides, we also plan to stay in Finland for long.
The problem is: someone told us the monthly rent will be pretty much the same as the amount we'll pay for if buying a similar apartment. We're aware that finding a good apartment for rent in Helsinki area is such the pain. Hence, it kinda makes sense to buy the apartment in this case, right?
Well, I just don't think the math is just that simple. If so, everyone would buy their own apartment already

Can someone here with experience in buying home help us with this question?
If buying an apartment is a good option, where can we start?

Cheers,

[betelgeuse]

The problem is: someone told us the monthly rent will be pretty much the same as the amount we'll pay for if buying a similar apartment. We're aware that finding a good apartment for rent in Helsinki area is such the pain. Hence, it kinda makes sense to buy the apartment in this case, right?
Well, I just don't think the math is just that simple. If so, everyone would buy their own apartment already

Not everyone can get the financing required from a credit institution.

[gowthas]

Hi

I would advise you to go and visit the bank regarding your loan first.

I heard that there was a significant change in housing loan regulations. For example, since last summer, one need a Permanent Residence (PR) in order to get a housing loan.

Make an appointment, take relevant documents, have a discussion!

Good luck!

[betelgeuse]

I heard that there was a significant change in housing loan regulations. For example, since last summer, one need a Permanent Residence (PR) in order to get a housing loan.

Requirement for a permanent residence in terms of municipality of residence has always been there. However, I doubt they would required it in terms of the Aliens Act (Finnish legislation has varying definitions of permanent residence based on context). Legislation does not set hard rules for residency. They do want to see a couple years of residence so that they can evaluate credit ratings. Do you have any sources for your statement?

[riku2]

the buy/rent decision is pretty much like in any other country. some people don't like to be tied down and rent. some people consider rental money to be money down the drain and buy. With interest rates low it seems sensible to buy.
The main thing to beware of is checking when the plumbing was last renewed. This needs doing approx every 40 years, so anything built in the sixties/seventies needs doing soon (if not done already). this is massively expensive and you will have to move out for at least six weeks. it will cost about 30-50 thousand euro! So either buy something where the plumbing has been replaced already or something newer than 1990 (the quality of pipe work in 60's/70's was not good either so needs to be replaced earlier than in modern apartments).

[gowthas]

I heard that there was a significant change in housing loan regulations. For example, since last summer, one need a Permanent Residence (PR) in order to get a housing loan.

Requirement for a permanent residence in terms of municipality of residence has always been there. However, I doubt they would required it in terms of the Aliens Act (Finnish legislation has varying definitions of permanent residence based on context). Legislation does not set hard rules for residency. They do want to see a couple years of residence so that they can evaluate credit ratings. Do you have any sources for your statement?

I was told by a friend of mine who went to discuss housing loan with Nordea. The housing loan expert asked him the very first thing, if he has a PR or NOT and it has become mandatory. By the way, my friend luckily had the PR and secured a good deal. Worth to mention that my friend is a non-EU citizen.

[lkpro91]

Hi

I would advise you to go and visit the bank regarding your loan first.

I heard that there was a significant change in housing loan regulations. For example, since last summer, one need a Permanent Residence (PR) in order to get a housing loan.

Make an appointment, take relevant documents, have a discussion!

Good luck!

Thanks for the info, but what exactly is a Permanent Residence? We just graduated and got our type-A Residence Permits.
One of my friends also has the same type of permit but already got a promise from the bank. I guess we should go to the bank anyways.

the buy/rent decision is pretty much like in any other country. some people don't like to be tied down and rent. some people consider rental money to be money down the drain and buy. With interest rates low it seems sensible to buy.
The main thing to beware of is checking when the plumbing was last renewed. This needs doing approx every 40 years, so anything built in the sixties/seventies needs doing soon (if not done already). this is massively expensive and you will have to move out for at least six weeks. it will cost about 30-50 thousand euro! So either buy something where the plumbing has been replaced already or something newer than 1990 (the quality of pipe work in 60's/70's was not good either so needs to be replaced earlier than in modern apartments).

Thanks a lot. I absolutely have no idea about the plumbing By the way, do you have any idea about maintenance fee? I took a look at some apartments on Oikotie and the maintenance fee is usually couples of hundreds of euros per month. Why is it so expensive?

[rinso]

the maintenance fee is usually couples of hundreds of euros per month. Why is it so expensive?

It could include some free services like internet or tv cable (or water and electricity).
There are many things that need to be maintained (elevator, central areas, sauna, storage, outside paintwork, windows .....).
The salary of a (part time) janitor.

Owning a house or apartment cost more than just the mortgage.

[Upphew]

the maintenance fee is usually couples of hundreds of euros per month. Why is it so expensive?

It could include some free services like internet or tv cable (or water and electricity).
There are many things that need to be maintained (elevator, central areas, sauna, storage, outside paintwork, windows .....).
The salary of a (part time) janitor.

Owning a house or apartment cost more than just the mortgage.

Heating is usually the largest sum when you check the books. Trash doesn't collect itself. Hallway lamps need replacement and even electricity. Real estate tax needs to be paid. Hauling snow gets really expensive really quick... there are a lot of things that cost money.

[GmoDelft]

Interestingly, NORDEA told me this week, foreigners cant get housing loan unless you have P (permanent) resident. at least one of the family member have to have P or finnish nationality. weired !!
But Dansk Bank have great service

[tavastia]

Nordea is trash, unless you have millions saved into an account. just go to any other banks.

[Querfeldein]

I'm weighing those same questions at the moment. For first-time buyers, there's no tax, and right now, you can still also get tax-deductions on your interest payments. Interest rates are also very low right now, but on the flipside, the price/rent ratio in central Helsinki is probably close to 30 - those are probably not entirely uncorrelated

Let's see. I feel like I need a little more information to be able to make an informed decision. I've made a loan application to my bank, just to get an idea of what kind of terms I would get, not just based on the debt/value ratio, but also based on my other, personal circumstances.

[inkku]

Some issues to be considered:

*banks require own capital and/or collateral, that might limit the maximum amount you can borrow.
*they will put you through "acid text", using annual interest rate 6%
*The flat which is a good deal to buy might not be the one where you want to live.
*in Helsinki, small flats/studios tend to disappear before they even come to the market
*it is important to estimate the forthcoming major reparations, not only putkiremppa but others as well (facade, windows, roof)

Most banks have good information about buying houses on their website, here nordea, wth lainalaskuri you can check your monthly payments with different interest rates
https://www.nordea.fi/en/personal-custo ... ng-a-home/

hypo might be worthwhile checking, it is not a bank bot provides housing loans
http://www.hypo.fi/en/