Garantia Residential Mortgage Guarantee

A guarantee is needed to cover the collateral shortfall when the required mortgage loan is larger than the collateral value of the home being purchased. Banks often require collateral for the full loan amount, while the home being purchased usually qualifies as collateral for only 70% of its value. With Garantia’s Residential Mortgage Guarantee, you can buy a home without your own savings, personal guarantors such as relatives, or other additional collateral. The guarantee also allows you to leave your savings as a buffer for a rainy day.

Garantia’s Residential Mortgage Guarantee is a financial guarantee by which Garantia guarantees the repayment of your loan to the bank, up to the guaranteed amount. Through the guarantee, the bank gets the additional collateral it requires to secure the mortgage loan. The borrower, in turn, gets the additional collateral needed for the loan and does not have to seek additional collateral from relatives, for example.

If the borrower is unable to repay the loan to the bank, the bank may claim compensation from Garantia under the guarantee. Once Garantia has paid compensation to the bank, Garantia, as the guarantor of the loan, has the right to recover the compensation it has paid to the bank from the borrower.

You can buy the Residential Mortgage Guarantee directly from one of Garantia’s partner banks in connection with your mortgage loan negotiations. You only need to ask the bank about Garantia’s Residential Mortgage Guarantee. The bank will assess whether the guarantee is suitable for your situation and will go through the terms and the fee with you. There is no need to contact Garantia separately.

A one-off guarantee fee is paid for Garantia’s Residential Mortgage Guarantee when the loan is drawn down, meaning there are no ongoing monthly costs. You will receive an exact price calculation from one of Garantia’s partner banks during the loan negotiations. At the same time, the bank will assess whether Garantia’s Residential Mortgage Guarantee is suitable for your home purchase.

Example of guarantee pricing:

The debt-free price of your home is EUR 200,000, the required loan amount is EUR 180,000 and the guarantee need is EUR 40,000. The one-off fee for using the guarantee is approximately EUR 1,800. When you ask one of our partner banks about the possibility of using the Residential Mortgage Guarantee, you will also receive more detailed information about the price of the guarantee.

Garantia’s partner banks are Aktia, Hypo, OmaSp, OP, S-Bank and Savings Banks Group. You can request a loan offer even if you are not already a customer of the bank in question.

No, Garantia’s Residential Mortgage Guarantee is intended for both first-time home buyers and home movers.

Yes. Garantia offers a separate investment property loan guarantee as additional collateral for buying an investment property. Please see the more detailed product information and terms on our investment property loan guarantee page.

Yes. A mortgage guarantee can be used to replace and release additional collateral or personal guarantees previously provided by parents or other relatives. You can therefore also apply for the guarantee for an existing loan if you want to change the collateral arrangement afterwards.

The mortgage guarantee is a one-off fee product, and the guarantee fee or any part of it will not be refunded even if the guarantee later becomes unnecessary.

The guarantee itself does not prevent, for example, longer loan terms or repayment holidays, but these matters must always be agreed with the bank granting the guarantee.

There may be several reasons behind this. You can ask for more detailed information from the bank from which you requested the loan offer.

Yes, it is possible to get a mortgage loan without your own savings if your repayment capacity is sufficient and the loan has adequate collateral. Finnish loan-to-value regulation does not specifically require savings, but sufficient collateral.

Because the home being purchased usually covers only approximately 70% of the collateral required for the loan, additional collateral is needed for the remaining part. If you do not have savings or other assets, the collateral shortfall can be covered with Garantia’s Residential Mortgage Guarantee. In this case, the loan may cover up to 100% of the purchase price of the home. However, banks usually require that the borrower is able to pay the guarantee fee from their own savings. The final financing decision is always made by the bank.

Did you not find an answer to your question? Ask one of our partner banks for more information about Garantia’s Residential Mortgage Guarantee.