Marie* (27) recently bought her first apartment. “I had been watching the real estate market for a while, but since I wasn't in a rush to buy, I waited for the right home and saved up for the down payment at the same time. A few months ago, I came across a listing that felt perfect, and I didn't have much time to think – I found my dream apartment, got a positive loan decision, and soon after, it was all about the notary, the keys, the joy... and an empty room,” Marie described her home-buying experience.

Marie started carefully planning the furnishing of her apartment, creating a list of necessary items along with their estimated costs. “Even though the apartment was technically ready for move-in, I didn't have any furniture, and I wanted to make a few changes. The list of essentials quickly became quite long, and I was left wondering – how can I furnish my apartment when all my savings went to the down payment? The monthly loan payment is also quite high due to the Euribor, and since this is my first real home, I prefer to invest in something of quality and durability rather than temporary solutions,” Marie admitted.

Evelin Rahkema, Head of Card and Loan Sales at Inbank, pointed out that many homeowners underestimate the additional costs associated with buying a home. "When taking a home loan, it is wise to consider the costs of furnishing and essential appliances from the beginning – these expenses can easily add up to several thousand euros."

“Unfortunately, it is not always possible to get a home loan for an amount that also covers furnishing and renovation costs, which is why it is not uncommon for buyers to put all their savings towards the down payment,” Rahkema explained, adding that borrowers often take the maximum loan amount offered by the bank. According to LHV data, the average loan amount last year was nearly 142,000 euros.

“Ideally, it is best to save early for a ‘soft landing’ when buying a home – a fund separate from the down payment meant for furnishing, initial notary and contract fees, and possibly even minor repairs,” Rahkema advised. However, this is not always possible, especially for young buyers. If the savings have already gone towards the down payment, Rahkema emphasized the importance of careful planning for the next steps.

"Start by listing the necessary renovations or purchases and determine the costs of specific tasks or items. Consider which expenses are essential and which can be postponed or avoided for a while. When buying furniture and appliances, see if it is possible to pay in installments without interest, which helps spread out the expenses," Rahkema suggested.

Prefer Interest-Free Payment Solutions

Rahkema added that most major appliance and furniture stores offer installment payment options, and "buy now, pay later" solutions are most popular for these purchases. Of course, every payment solution comes with an obligation, but for consumers, it is more reasonable to use interest-free payment options rather than high-interest installment plans. However, "buy now, pay later" options are generally meant for smaller purchases – in 2024, the average purchase amount using this solution was around 300 euros.

Credit cards are also commonly used when furnishing a new home. However, Rahkema warned that this can become costly. “On one hand, credit cards offer flexibility in paying for purchases, but on the other, the interest cost can quickly accumulate. If you need to buy several essential items or renovate expensive areas like the bathroom or kitchen, it may be wiser to consider a renovation or small home loan instead. Over a longer period, the interest on an unsecured, purpose-specific loan can be significantly lower than the interest costs of multiple installments or credit card purchases,” Rahkema explained.

Marie also noted that buying a home doesn't end at the notary but rather begins there. “And if all your savings went toward the apartment, you must move forward wisely – step by step and with a budget that allows you to breathe comfortably without feeling overwhelmed by expenses,” she said.

*Name changed.