Frequently asked questions

How long has Nordic Hypo been operating?

The company has been operating since 2010, but our team has over 20 years of experience in the financial sector.

Are loans from Nordic Hypo secure?

Security and confidentiality are essential factors in financial matters, and there can be no compromise on these issues. The Nordic Hypo team has many years of experience working in the financial sector, so our clients can rest assured that their personal data and loan information are protected. The Nordic Hypo team uses a modern and thoroughly tested IT system, with special attention paid to data protection.

Who are Nordic Hypo’s main clients?

Nordic Hypo finances companies against real estate collateral. Our strategic focus is on real estate entrepreneurs, but companies in other sectors may also apply if they have a justified business need for financing and potentially suitable real estate collateral. Many of our clients are small businesses in need of additional financing to branch out into a new line of business or to finance their existing business.

How high is Nordic Hypo’s loan interest rate?

We offer loan products to our clients where interest is calculated on the actual loan amount (similar to banks). Our interest rates start from 9% per annum. Individual loan offers depend on the desired loan period, payment schedule, collateral offered, and the client’s creditworthiness. For a specific offer, please contact our client service representatives.

How risky is a loan against real estate collateral?

Each loan is a financial obligation. Nordic Hypo’s goal is to make sure that clients make informed loan decisions and that the financing solutions offered fully meet clients’ needs and possibilities. We value long-term and trust-based client relations and do everything we can to help clients choose a suitable and affordable financing solution.

Does Nordic Hypo refinance existing loans from other financial institutions?

Refinancing of existing loan obligations may be considered if the transaction has a clear economic rationale and a credible repayment plan. Refinancing is not Nordic Hypo’s main focus, and Nordic Hypo does not offer debt consolidation or debt rescue for clients in payment difficulties.

Is it possible to repay the loan earlier, and is there a penalty?

You can repay the loan early. There is no penalty if you give three months’ notice of early repayment.

What percentage of the value of the real estate is taken into account for a mortgage loan?

Nordic Hypo offers loans against real estate collateral, where the loan amount and conditions depend on the value of the collateral and the client’s solvency. The exact share is determined by assessing the specific transaction.

What is the difference between a mortgage loan and a loan against real estate collateral?

A mortgage loan and a loan against real estate collateral are not different types of contract. In both cases, the loan is secured by a mortgage established on real estate, and the name is the lender’s choice. Offers differ in their terms, such as the loan amount, interest, term, fees and collateral.

With a Nordic Hypo mortgage loan, the purpose of the loan does not have to be related to real estate, and the collateral may also be a property other than the one being invested in.

Are there any income tax incentives or restrictions related to mortgage loans?

In most cases, taking out a mortgage loan in Estonia does not automatically result in income tax incentives when using the loan money – taxation depends more on how you use the loan money (for example, investing in real estate may later affect the taxation of profits) and the tax laws in force. 

If you need specific tax advice, we recommend consulting a tax adviser or accountant.

Can mortgage loans be taken out even if the real estate is partially unrenovated or in poor condition?

Yes! You can get a mortgage loan even if your real estate needs renovation or isn’t finished yet. The potential amount and conditions of the loan depend on the assessment of the value and condition of the collateral, as determined by an independent appraiser. Assessment is important because it influences the size and conditions of the loan. Generally speaking, unrenovated properties are often valued more conservatively, which may limit the maximum loan amount. 

What documents do I need to submit to apply for a loan?

Nordic Hypo’s application form calls for company details such as the business name, registry code, and a representative’s contacts, so you must submit proof of company registration and personal details (given names and last name, and personal identification code). 

In addition, we require a description of the collateral (e.g. real estate details) and information about the collateral. Nordic Hypo’s consultant will give you a more detailed list of documents after reviewing your initial application.

Can a company take out a loan for the purchase of real estate or for making investments?

Yes. Nordic Hypo offers business mortgage loans that can be used to purchase or improve  real estate or to finance investments. The loan amount and conditions depend on the value of the collateral and the financial situation of the company.

Can a business loan be without collateral, or is collateral always required?

Nordic Hypo offers loans collateralised by real estate, such as mortgage loans or credit lines against real estate collateral. This means that the loan is secured by real estate on which a mortgage is established.

What is refinancing?

Refinancing means replacing an existing loan with a new one, for example to change the loan term, payment schedule, collateral or lender. Nordic Hypo may consider refinancing if the transaction has a clear economic rationale and a credible repayment plan.

How does loan refinancing work?

  1. You submit a refinancing application to Nordic Hypo.
  2. Our loan managers assess your existing commitments and needs.
  3. If the conditions are right, a new loan contract will be signed to repay the old loans.
  4. From then on, you repay the loan according to the terms and payment schedule of the new loan agreement.

How does refinancing against real estate collateral work?

In refinancing, real estate is used as collateral for the new loan. The new loan is used to repay the existing obligation, and the terms of the new loan agreement apply from then on. Whether refinancing makes sense depends on the economic rationale of the transaction and the repayment plan.

Is refinancing a way to resolve payment difficulties?

No. Nordic Hypo does not offer debt consolidation or debt rescue for clients in payment difficulties. Refinancing may be considered if the transaction has a clear economic rationale and a credible repayment plan.

Do I always have to get a new appraisal report when refinancing?

Whether or not you need an appraisal report depends on the conditions of the loan you’re refinancing and the collateral provided. If the loan being refinanced is collateralised by real estate, it’s usually necessary to have the property appraised again to determine its value and the amount of the new loan.

How long does the refinancing process take?

The speed of the process depends on the availability of documents and the appraisal of the real estate, but it usually takes anywhere from a few days to a couple of weeks from submitting an application to receiving a loan. The specific duration of the process depends on how quickly we receive all the necessary documents. 

What should I do if my bank rejects my loan application?

Banks can be less flexible than other financial institutions. This means you can still come to us even if your bank turns you down.

In addition, if the bank rejects your application: :

  • Look into the reasons for rejection – this may determine what can be improved (e.g. solvency, income, documentation).
  • Improve your credit history or financial situation before reapplying.
  • Consult a financial adviser or review alternative refinancing options with other financial institutions.