Thursday, November 14, 2024
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Loan refinancing

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A lot of people in Denmark with mortgage loans are looking now to refinance them. While you can reduce your debt that way, it comes with risks. 

  • When you get a mortgage loan, you look at the interest rate (the cost of having the loan) and the exchange rate (how many DKK you get for a 100 DKK debt). To get a favorable loan you need an interest rate that is as low as possible (under 2%) and an exchange rate that is as close to 100 as possible. 
  • The rise in interest rates has pushed the exchange rate to nearly 100. For people that got a mortgage loan with a low exchange rate (f.ex. 92) it can make sense to refinance their loan to reduce their total debt. However, this also means a higher cost for having the loan. So, this only works, if you have enough available income. Check out this Facebook group where people share tips on mortgage loans refinancing. 
Narcis George Matache
Narcis George Matachehttp://www.narcis.dk
Executive Editor and Founder of "Last Week in Denmark".

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