Expert Calculates: Should You Save Another Year of Down Payment or Buy a Home Now?

If the down payment required to buy a home is already saved up, the question may arise whether to buy a home now or continue saving for another year to reduce the future loan payment. Especially if the current rental home is suitable and there is no rush to move.

According to Anne Pärgma, head of residential lending at Swedbank, it is worth calculating what the additional savings would bring in financial terms when making such a decision.

For a home loan, a typical down payment is 15% of the purchase price of the property. For certain target groups, it may be possible to purchase a home with a smaller 10% down payment through state guarantees. Although a larger down payment reduces the loan amount and monthly loan payment, waiting to purchase can still turn out to be more expensive.

How much does one year of saving change?

For example, a person has saved 30,000 euros, which is enough for a 15% down payment on a home worth 200,000 euros. If they postponed the purchase by a year and saved an additional 10,000 euros during that time, the down payment would grow to 40,000 euros, and for the same home price, the loan amount would decrease from 170,000 euros to 160,000 euros.

If we take into account a 1.45% margin and the current 2.9% Euribor, the monthly payment for a 30-year home loan of 170,000 euros would be approximately 846 euros. For a 160,000 euro loan, the monthly payment would be approximately 796 euros, or roughly 50 euros less.

However, one must take into account the possible increase in real estate prices. According to Statistics Estonia, Estonian residential prices in the second quarter of 2026 were 5.8% higher than a year before.

If a home worth 200,000 euros increased in price by 5% over a year, it would cost 210,000 euros after a year. In this case, the person's additional 10,000 euros saved would be the same as the home's price increase, and the person would still need to take out a 170,000 euro loan to buy the home. In addition, rent would need to be paid for a year.

According to Pärgma, a home loan is a long-term obligation that should be carefully considered. "If a suitable home has been found, the down payment is sufficient, the monthly payment is affordable, and there is still a financial buffer left after the purchase, there may not be a reason to postpone the purchase solely to save a larger down payment," she added.