The low-interest-rate has come to stay in the near future, according to 85 percent of the Political Economic Panel, who believe it can take 2-5 years before interest rates start to rise. The low-interest rate is a combination of many things, including the low growth in the EU and the unrest abroad (Ukraine) it causes investors to invest in secure securities, for example. Danish mortgage bonds.

It is also a combination of inflation which is still very low in the EU, due to the fact that there is a lot of debt holding back growth. But what does the low-interest rate mean for private individuals who would like to borrow or reschedule their loan?

The right loan for you

The interest rate has probably fallen since the last time you refinanced your private loan , so you can well imagine that it is a good time to get your loan repaid. But there are several things you need to be aware of if you want to restructure your loan. It depends on the situation you are in.

For example. If you are considering relocating your home within the next couple of years, the borrowing costs of rescheduling your loan may not have the major savings and therefore will not pay off for you and your situation.

However, if you want to borrow/reschedule your loan, you must be aware of the bond rates and interest rates that are constantly changing. Therefore, you need to strike when bond rates and interest rates are at a level that will give you a long-term gain. If you choose to borrow/reschedule your loan, consider whether the loan should be a fixed rate bond or a variable rate loan.

Bond loans are mortgages with fixed interest rates over the term of the loan. You can borrow up to 80% of your home value up to 30 years. You can terminate the loan at your convenience by purchasing the underlying bonds at market price.

Advantage:

loan money

You know the interest rates and repayments throughout the loan term 

Opportunity to get interest-free period from 1-10 years 

If interest rates rise, your debt decreases

Disadvantages: 

loan money

The interest rate is higher on a variable rate loan 

Interest-free period must be selected at the time the loan is paid off, the period is fixed and a change in the interest-free period requires a restructuring of the loan.

Variable-rate loans are loans that cannot be financed with a mortgage loan, you have the option of borrowing the last 20% of your home value, for the use of renovation projects, a car or for owned consumption.

Advantage

The loan has a variable interest rate, which means that during periods your service will increase or decrease.

You can pay more off the loan than agreed, or pay off the loan altogether.

The loan has a maturity of up to 30 years

Disadvantages:

No fixed interest rate – the interest rate is variable, if the interest rate increases, your benefits increase

No matter what loan you are considering, it is important that you get the right advice that is important to you and your needs in life. You and your bank advisor must find the loan that best suits you and your financial situation.

 

Leave a comment

Your email address will not be published. Required fields are marked *