Interest-only period(s)

What is an interest-only period

• You only pay interest and fees, and defer repayment of the loan principal.
• A solution if you have increased costs or loss of income for a limited period, but be aware that the total cost of the loan increases.
• As a general rule, the home loan must be lower than 60% of the property's value to be granted an interest-only period.

An interest-only period is an option for you if you have a loan-to-value ratio below 60% of the property's value, but you can also consider other alternatives to reduce your monthly costs.

Extend the repayment period on the home loanT

By extending the repayment period on your home loan, you can reduce your total monthly cost, even when interest rates rise. If the interest rate increases, the effect will instead be a shift between interest rates and repayments, if you make the repayment period longer.

This means that you will continue to pay down your loan, but that the repayments will be somewhat reduced each month because you must pay down the loan over a longer period than previously. Please note that the total cost of the loan may increase if you do not reduce the repayment period at a later date. The maximum repayment period is 30 years.

Get more predictable loan costs with a fixed interest rate/combination loan

The main advantage of a fixed-rate loan is that your finances are not affected if interest rates rise. You know exactly what your home loan costs will be for a period ahead. The disadvantage is that your costs do not decrease if interest rates fall. It is important to be aware that you have committed to paying the fixed interest rate for the entire agreed fixed interest rate period, even if the general interest rate level drops. Therefore, consider a fixed-rate loan if you are thinking long-term and want predictability in your finances.

Alternatively, you can combine fixed and variable interest rates. We currently offer a Combination Loan, with part variable rate and part fixed rate. You are free to choose the distribution you prefer, as well as the fixed term period. Often, a combination loan can be the "best of both worlds", as you get the security and peace of mind a fixed-rate loan provides, in addition to the flexibility a variable-rate loan offers.

Do you need advisory services?

Are you concerned about your finances? We will go as far as we can to help you make ends meet. You can easily arrange an advisory meeting with us or call us on 915 04 800.