Cheaper House, Pricier Move: Does a Second Car Eat Away the Benefits of Moving Out of the City?

According to the Land Board and Building Register, in the first quarter of 2026, a square meter of an apartment on the secondary market in Tallinn cost an average of 2,971 euros, while outside Tallinn the Estonian average was 1,352 euros. Although apartment and house prices cannot be compared one-to-one, the large price difference shows why many homebuyers are looking beyond the capital.

About 20–30 kilometers from the city, you can get a larger house, more privacy, and your own garden for the same price as a city apartment. For many families, a greener living environment is a conscious choice, for which they are willing to spend more time commuting. There may be other reasons for moving out of the city, such as the desire to live in the same area as loved ones. However, if the goal is to reduce housing costs, it is worth looking not only at the real estate price and future loan payment, but also at how daily mobility costs change.

According to Anne Pärgma, head of residential lending at Swedbank, a family living in the city can generally get by with one car or without one altogether. "Moving out of the city, however, can create a need for as many as two vehicles. This is especially likely if both adults work in different locations, children's schools and extracurricular activities are far from home, and public transport schedules don't fit the family's daily schedule," she said. In this case, the second car essentially becomes part of the cost of home purchase.

Besides a home loan, it's worth calculating mobility costs as well

Whether buying a home further from the city is also financially more favorable should be viewed as a whole.

If we assume, for example, that an apartment in the city costs 300,000 and a home outside the city is 100,000 euros cheaper, this does not automatically mean a 100,000 euro smaller loan. If the family makes a 15% down payment in both cases, the difference in loan amounts is 85,000 euros. With a 30-year loan period and an example of 3% Euribor and 1.45% margin, this would mean approximately 430 euros less per month when purchasing a home outside the city.

If the family needs a second car after moving, the impact on the family's budget depends very much on the chosen vehicle and how it is financed. If you take, for example, a car costing 30,000 euros with a 10% down payment and a five-year leasing period, the lease payment could be approximately 530 euros per month. "You also need to account for insurance, fuel, maintenance, tires, and motor vehicle tax, which can increase the monthly cost of the car by several hundred euros more," said Pärgma.

So in the given example, the cost of the second car would exceed the savings from the smaller home loan payment, at least during the leasing period. However, you could choose a much cheaper vehicle as a second car, so the second car does not automatically mean such a large monthly additional expense. If the goal is primarily to reduce costs, it's worth calculating different options.

If moving out of the city supports other goals for the family, a larger mobility expense can be a completely conscious part of that choice. "It is important to understand before making a decision what you want to gain from changing location and what impact it will have on the family's budget," she explained.