Estonia or France

Estonian are able to borrow at better terms than French

Swedbank representatives say that this is the best time in the last ten years to take a mortgage loan, adding that thanks to strong country rating, Estonians are able to borrow at better terms than the French state.

Tukk who heads the private financing division of Swedbank Eesti, added however, that loan margins were likely to start going up because global developments have increased the cost of capital.

According to him, the biggest problem today is that people do not dare to buy real estate. The bank estimates that there are between 25,000 and 30,000 households which are still able to take a mortgage loan.

These families would have plenty to choose from since there are about 1,500 new apartments on sale in Tallinn of which 600 are ready and 900 are being developed.

Tukk says that although the bank is issuing more housing loans, the total outstanding housing loan stock is decreasing. About a third of existing borrowers are also trapped since the value of the real estate that they bought during the boom times is now lower than their outstanding debt to the bank.

Ero Viik, head of the bank’s property and construction department, says that Although the real estate market is back to where it was in 2006, the number of transactions is not growing.