Loans against real estate collateral and mortgage loans are two similar concepts, but at Nordic Hypo, they are different services. The common feature of these loans is that they can be used to accomplish goals and make dreams come true. Let’s take a closer look at how loans work for private and business clients.
What is a mortgage loan?
A mortgage is a type of loan collateralised by real estate. A mortgage can be established on different types of real estate. Unbuilt plots, forest land, and buildings are all suitable for this purpose. Residential buildings, apartments, summer cottages and garages, as well as commercial buildings, warehouses or production facilities, can also serve as collateral. Mortgaging buildings used for commercial purposes is a common way for companies to ensure that they can achieve their goals.
In the context of services provided by Nordic Hypo, a mortgage loan refers to a loan collateralised by real estate and intended for companies (private limited companies, public limited companies, self-employed persons).
What is a loan against real estate collateral?
Mortgage loans are defined by real estate serving as collateral for the loan. A loan against real estate collateral works exactly the same way, except it’s intended for private individuals rather than companies.
Different financial institutions frequently use these two definitions to describe the same service
While we offer mortgage loans to businesses, loans against real estate collateral are intended for private individuals to help them achieve their dreams or attain long-awaited goals. This could mean a trip you’ve been wanting to take for a long time, a new car or home, home renovations, or something else entirely – it’s a flexible loan that gives you the freedom to do whatever you want. Decide on the amount and repayment schedule that works for you, and you can get started right away.
Mortgage and taxes
Pursuant to the Estonian Value-Added Tax Act, mortgage loans are not subject to VAT, but there are no tax incentives for mortgage loans as of 2025. Since January 2024, private individuals can no longer deduct home loan interest from their taxable income; no similar tax incentive applied to mortgage loans.
When can you get a loan?
A loan against real estate collateral is an excellent option if you have adequate income to service a loan but, for one reason or another, are unable to get one from a bank.
A loan collateralised by real estate offers greater security to lenders. Even though many lenders do not offer loans to clients who have previously had payment problems, a loan against real estate collateral is still a potential option for individuals with a history of default. However, this requires us to assess each specific case individually – if you’re interested, please contact the Nordic Hypo team and we’ll look into whether taking out a loan would be possible and reasonable.
One of the services we offer is loan refinancing, which can be beneficial in situations where multiple loans have complicated your financial situation and caused payment difficulties. By consolidating loans, you can replace multiple loans with a single loan, making the situation clearer and more manageable.
If I already have a mortgage, can I still get an additional loan against real estate?
Nordic Hypo offers flexible loan refinancing to make it easier for you to keep track of your finances and manage them more effectively. If you already have a loan against real estate but need another loan, for example, to renovate your home, you may be eligible for a second mortgage loan, i.e. a mortgage in second ranking.
The prerequisite for taking out an additional loan on top of an existing mortgage is that the collateral still has the necessary “reserve”” – for example, if the first loan amounts to 40–50% of the value of the collateral, part of the loan has already been repaid, creating free resources, or the value of the real estate used as collateral has increased over time. Contact our team for more information.
Terms and conditions of loans for companies and individuals
The maximum loan amount available to businesses tends to be higher than that available to individuals. This is because the activities and financial needs of a company usually have a larger scale, allowing for investments that can lead to significant growth, or because they’re related to development, so banks may consider a higher mortgage limit for companies than for individuals.
Nordic Hypo offers loans against real estate collateral to private individuals starting from €5,000 and up to a maximum of €300,000.
A loan against real estate collateral allows financing of up to 70% of the value of your real estate. If additional collateral is provided, you can borrow 100% of the appraised market value of the collateral.
We are aware that creating change in business can require significant investment. Similarly, the mortgage loan offered by Nordic Hypo to companies (private limited companies, public limited companies and self-employed persons) is higher – the minimum loan amount is €15,000, while the maximum loan amount is up to €2,000,000.
In the case of a mortgage loan, we finance up to 75% of the value of the collateral, which may reach up to 100% if additional collateral is provided.
The maturity of a loan backed by real estate can range from two months to 15 years. The repayment period for mortgage loans taken out by companies is 10 years.
The contract fee for both individuals and companies is 1% of the loan amount, which is deducted upon disbursement. From that moment on, the loan will be at your disposal and you can start working towards your goals and dreams.
To determine the specific loan amount and interest rate, we estimate the value of the collateral and the borrower’s solvency. The interest rate applicable to private individuals and companies starts at 9% per annum, plus the 6-month Euribor.
Under what conditions can both companies and private clients get a loan?
Characteristics of a company eligible for a mortgage loan:
- The company is registered in Estonia
- The company has been assessed as capable of paying taxes
- The company has no active defaults
- Annual report and balance sheet
- When taking out a loan to start a new company or expand business activities into a new field, you will generally also need to present a business plan
Individuals wishing to borrow:
- Must be Estonian citizens or have a long-term residence permit
- Should have no defaults in the last three years
How quickly can I get a loan?
Nordic Hypo is all about flexibility and speed – it takes as little as a few days from application to financing for both private and business clients.
If you feel that the time is right to pursue your long-term goals or dreams, a real estate-backed loan from Nordic Hypo can make it possible.
If you have any questions, send us an enquiry. If you’re already sure about your plans, you can apply for a loan against real estate collateral either at a Nordic Hypo office or online around the clock. Filling in the application is easy and you’ll get an offer in a matter of days.