How Is the Down Payment Size for a Mortgage Determined in Estonia?

When applying for a mortgage, a minimum down payment of typically 15 percent is required. According to a Luminor expert, it is possible to reduce this sum using support measures or additional collateral property.

A person applying for a mortgage in Estonia must account for own financing, which is generally at least 15 percent of the value of the property being purchased. This means that for a flat costing 100,000 euros, the buyer must have at least 15,000 euros in equity available.

Elar Ollik, team leader of Luminor's partnership unit, explains that the 15 percent down payment is not always set in stone. In certain situations, the required own financing can be reduced by using state support measures or pledging additional property as collateral.

Among support measures available in Estonia, KredExi guarantee is the best known, which allows young families or first-time homebuyers to obtain a loan with a smaller down payment. In this case, the state guarantee covers part of the security required by the bank, so the buyer does not need to accumulate the entire 15 percent own financing themselves.

As an alternative, the down payment size can be influenced by pledging additional property. If the borrower or their close relatives own other real estate that can be pledged as additional collateral, the bank may agree to a smaller cash down payment. In this case, the value of the additional property compensates for the shortfall in own capital.

Experts advise that before applying for a mortgage, it is worth thoroughly researching all available support measures and discussing your situation directly with a bank representative, as conditions can vary significantly depending on your specific circumstances and the lender.