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.