Living in Finland

Cities

Oma asunto
theme icon

Owner-occupied housing

Owner-occupied dwelling is often cheaper than rental dwelling in the long-term. Most Finns live in dwellings they own.

There are other alternatives, in addition to owner-occupied dwelling and rental dwelling. Read more on the Infopankki pages Right-of-occupancy dwelling and Part-ownership dwelling.

Housing share and real estate

When you buy a dwelling, you either purchase a housing share (asunto-osake) or real estate (kiinteistö).

Housing shares are dwellings in either blocks of flats or terraced houses. These houses are owned by housing companies.

When you buy a detached house, you buy real estate. Real estate usually comprises a detached house and the related plot.

Where to find owner-occupied housing?

When looking for a dwelling, you should prepare for up to several months of searching.

Dwellings are sold by private persons, real estate agencies and housing constructors. Adverts for available dwellings can be found online and in newspapers, for example. Once you find a dwelling that interests you, book a time with the seller to go and see it. Sometimes the adverts indicate a time when you can go and see the dwelling. In such cases, you do not need to book a time in advance.

linkkiEtuovi.com:
Search for owner-occupied housingFinnish | English

linkkiOikotie.fi:
Search for owner-occupied housingFinnish

linkkiFinnish Competition and Consumer Authority:
Information on buying a homeFinnish | Swedish | English

Find out about the condition of the dwelling and other matters

Once you have found a dwelling that you like, gather all of the relevant information on it. In particular, you should find out about the condition of the dwelling.

If you are about to buy a housing share, find out if any renovations are planned in the housing company, and if yes, what the related costs will be. For example, a plumbing renovation can cost the owner-occupier tens of thousands of euros. You can obtain information on forthcoming renovations from the house manager.

Responsibilities of seller and buyer in dwelling sales

The seller of a dwelling is held responsible for any defects in the dwelling for some time after the sale. The seller’s responsibility for defects usually lasts for two years in the case of housing shares. In the case of real estate, the seller’s responsibility lasts for five years.

By law, the seller of a dwelling must notify the buyer of any known defects in the dwelling before the sale. If it is clear that the seller has known about a defect in the dwelling, but has failed to inform the buyer of it, the seller may be obliged to pay compensation to the buyer.

Before you buy a dwelling, inspect it for any defects. You cannot demand compensation for a defect afterwards if

  • you should have noticed the defect when inspecting the dwelling; or
  • you were aware of the defect before buying the dwelling.

The dwelling may also have hidden defects. This refers to damage of which no one is aware. Hidden defects often include water damage, for example. If the dwelling has a serious defect which, if known, would have affected the sale of the dwelling, the seller is obliged to pay compensation to the buyer.

Mortgage

Most people finance their dwelling purchases with a mortgage (asuntolaina). Anyone can apply for a mortgage from a bank. In order to be granted a mortgage, your income needs to be at a level that allows you to repay the loan without problems. Many banks have mortgage calculators on their website. These allow you to make advance assessments of whether or not you would be able to repay the mortgage.

If you are unsure about whether a bank will grant you a mortgage, it is advisable to visit a bank and negotiate the loan well before buying a dwelling.

Mortgages are repaid, i.e., instalments are paid off, once a month. In addition, you must pay the bank interest (korko) on the loan.

You can ask for offers from several banks and compare them. Different mortgages have different conditions. When you consider different mortgage alternatives, take account of the following:

  • What is the interest rate on the mortgage?
  • What is the amount that you must pay back every month?
  • How many years will it take to pay off your mortgage?

Bear in mind that if interest rates rise, the cost of your mortgage will also increase. In that event, the monthly payment to the bank will increase or the loan period will extend.

You can deduct mortgage interest from taxation.

linkkiFinnish Competition and Consumer Authority:
Information on mortgageFinnish | Swedish | English

Mortgage collaterals and securities

A mortgage usually requires collateral (vakuus). The dwelling that you will buy usually covers about 70 per cent of the mortgage. In addition to that, you need collateral for the remaining amount of the mortgage. You can arrange collateral by, for example,

  • Taking out a state guarantee (valtiontakaus) through your bank. The state guarantee covers up to 20 per cent of the mortgage and not more than 50,000 euros in total.
  • Asking one of your relatives or friends to secure the loan. If you are unable to repay the mortgage to the bank, the guarantor will have to pay the amount of mortgage he/she has secured.

However, you will not need guarantors for your loan if you have saved up part of the price of the dwelling in advance, or if you have property that can be accepted as collateral for the mortgage.

linkkiMinistry of the Environment:
Information on state guarantees for mortgagesFinnish | Swedish | English

Support for buying a dwelling

The state grants interest subsidy (korkotuki) on mortgages. Interest subsidy is granted to young people buying their first dwelling. It is also granted to those buying or building a detached house. Read more on the Ministry of the Environment's website.

linkkiMinistry of the Environment:
Information on interest subsidyFinnish | Swedish | English

Transfer tax

When buying a dwelling, you also need to pay transfer tax (varainsiirtovero). If you buy a housing share, the transfer tax is 2 per cent of the debt-free price of the dwelling. If you buy real estate, the transfer tax is 4 per cent of the debt-free price of the dwelling.

However, you will not need to pay transfer tax if all of the following conditions are met:

  • you are 18–40 years old
  • you have not previously owned a dwelling in Finland or another country
  • you own at least 50 per cent of the dwelling
  • you use the dwelling as your own permanent home.

linkkiTax Administration:
First-time homebuyers’ exemption from transfer taxFinnish | Swedish | English

Bidding

When you are sure that you want and can buy a dwelling, you can make a bid for it. It is advisable to make the bid in writing. The bidding price can be, for example, 5–10 per cent less than the seller is asking for the dwelling. However, the seller may not always be willing to lower the price that he/she has asked for.

A bid is binding. This means that you cannot cancel your bid. If you cancel a bid, you may need to pay a fine or the down payment to the seller. The amount usually equals a few per cent of the price of the dwelling.

linkkiAsuntojen.hintatiedot.fi:
Information on prices of dwellings soldFinnish | Swedish

Buying a dwelling

If the seller of the dwelling accepts the bid, the agreement is signed in the buyer’s bank. Those present usually include the buyer, the seller and the real estate agent if one was used.

A sales contract is an agreement specifying, for example, the size, price and condition of the dwelling as well as the day on which the buyer gains possession of the dwelling. The sales contract is usually prepared by the bank or the real estate agent. The buyer has the right to familiarise him/herself with the contents of the sales contract before the signing date.

The bank grants a mortgage to the buyer and the mortgage amount is transferred to the seller's bank account.

linkkiGuide on Finnish Law:
Dwelling sales contract modelFinnish

Down payment

A down payment (käsiraha) is an advance payment on the dwelling. The buyer can pay a down payment to the seller at the sale preparation stage. A down payment is usually around three per cent of the price of the dwelling. If your own savings are insufficient for making the down payment, you can borrow it from the bank as part of your mortgage.

Costs of owner-occupied dwelling

Your cost of living depends on the following:

  • the amount of your mortgage
  • the size of your dwelling
  • the condition of your dwelling
  • the location of your dwelling.

Housing share

If you own a housing share, you usually pay

  • repayments and interest on your mortgage
  • maintenance fee (hoitovastike)
  • charge for financial costs (rahoitusvastike) if the housing company holds debt
  • water rates and electricity charges
  • possible repairs.

Real estate

If you own real estate, you usually pay

  • repayments and interest on your mortgage
  • real estate tax (kiinteistövero)
  • water rates and electricity charges
  • heating costs
  • waste collection fees
  • possible repairs.