Loan cap (lainakatto, maximum loan-to-collateral ratio)

The loan cap (lainakatto), also called the maximum loan-to-collateral ratio, limits how large a share of the home’s price you can finance with a loan. In a normal home purchase, the bank can grant a loan of at most 90 % of the value of the collateral. For a first-home buyer the limit is 95 %. The rest is left for you to finance.

In practice this means that you need about 10 % of the purchase price in your own money or other collateral, about 5 % for a first home. For example, in a 200,000-euro home the own-financing share is about 20,000 euros, about 10,000 euros for a first home. The own money can come from savings, from an ASP account, or from a previous home you sold. It is worth setting aside money separately for the transfer tax (varainsiirtovero) and moving costs.

In addition to the loan cap, the bank tests whether your finances can withstand a rise in interest rates. A common practice is to calculate the monthly instalments at a stress rate of about 6 %, even if the real rate is lower. This cuts how large a loan you get, even if the loan cap itself would not be reached.

The loan cap is one reason why your maximum budget stops at a certain point. If your own money is just enough for 5 to 10 percent, a larger loan is not available without extra collateral, for example a state guarantee or other pledgeable property. Finanssivalvonta updates the limits and kept them unchanged in spring 2026.