OREANDA-NEWS. July 10, 2013. In the second quarter of 2013, the average interest rate for a home loan with a term of 20-30 years was about 2.3 per cent, about a year ago it was almost one per cent higher.

The average home loan monthly payment with loan payment insurance (borrower’s voluntary insurance that includes life insurance cover, severe health impairment, temporary incapacity for work, and loss of employment cover) is today about the same as it was a year ago without insurance, giving families a good opportunity to insure both prior and new loans.

According to SEB’s second quarter new home loan statistics, 70 per cent of families who have concluded a home loan contract also take the loan payment insurance, whereas the insurance coverage for loans has grown month by month.
 
Triin Messimas, Development Manager of Private Loans at SEB explained: “Families are very conscious about taking long-term obligations — they study loan conditions thoroughly and choose the most appropriate home carefully. Thanks to a favourable loan payment, the remaining money in the family budget is not spent lavishly, but is used for providing the family with a sense of security — for this money, they buy the loan insurance cover.”

Families with a home loan are more likely to purchase insurance cover for the man (more than 60 per cent of insurance contracts) and the most popular cover is life insurance cover (90 per cent of cases). The next risk that is considered to be important to be insured is the temporary incapacity for work (half of the cases) and then the loss of employment (a third of insurance contracts). The average policyholder insures himself against at least two risks (for example, chooses life insurance cover and temporary incapacity for work cover or life insurance and loss of employment cover). A borrower who has insured his loan commitment is on average 34 years old.