Combination Loan

The advantage of a fixed-rate loan is primarily that your finances are not affected if interest rates rise.

You know exactly what your home loan expenses will be for a period ahead. The disadvantage is that your expenses 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. This way you achieve predictability on the fixed-rate loan, whilst also benefiting from movements in the variable rate, and full flexibility for extra payments or full early repayment on the variable rate loan.

If you break out of the agreement before the fixed term has expired, you risk having to pay a premium, which in turn will result in increased total costs.

A fixed-rate loan has special terms that make it slightly less flexible than a standard mortgage. If you terminate the loan during the fixed term, this may incur costs, and you cannot increase or repay the loan as it suits you.

If you make changes or terminate the fixed-rate loan before the agreement period is over, the bank will perform a calculation that may result in you having to pay the bank a so-called premium. This is done so that the bank does not lose money on the change. This will be the case where the interest rate level for new fixed-rate agreements has fallen below the fixed rate you have on the loan during the fixed interest rate period. In the opposite case, you may receive money back from the bank (discount).

The right to any interest rate gain (discount) only arises when the loan has had a fixed interest rate for an uninterrupted period of one year before the time of calculation of the interest rate gain. The limitation does not apply in the event of sale of the customer's mortgaged property, debtor change due to relationship breakdown, or the borrower's death.

If you wish to make extra repayments on the fixed-rate loan portion during the agreement period, you should contact us first to check whether there is a premium or discount on the loan.

On the variable rate portion of the loan, you can make payments whenever you wish.

Premium and discount may arise if you make changes to the loan - settle the loan, make an extraordinary payment, receive interest-only period(s) or extend/shorten the repayment period - before the fixed interest rate period has ended.

Premium (interest loss):If the interest rate on new fixed-rate loans is lower than the interest rate on your fixed-rate loan, the difference represents a loss for the bank. In the comparison, we look at new fixed-rate loans with a fixed-rate period that corresponds to the remaining lock-in period you have on your loan. If you break the fixed-rate agreement before the fixed interest rate period is over, you must pay the interest loss. The same applies if you make extra repayments on the fixed-rate loan or make changes to the repayment plan.

Discount (interest gain):If the interest rate on new fixed-rate loans is higher than the interest rate on your fixed-rate loan, the difference represents an interest gain. In the comparison, we look at new fixed-rate loans with a fixed-rate period that corresponds to the remaining lock-in period you have on your loan. The main rule is that you receive the interest gain if it has been more than one year since you fixed the interest rate.

You can deduct interest loss/premium on your tax return, whilst interest gain/discount is subject to tax.

No later than six weeks before the end of the fixed interest rate period, you will receive information from us that the fixed period is about to expire. If the loan has not been repaid, you can choose between switching to a variable rate or entering into a new fixed-rate agreement.

We reserve the right to change the interest rate until we have received a signed offer.

Complete terms and conditions are shown in the loan documents you will receive upon ordering. In most cases, you can sign.

In most cases, it is possible to transfer the fixed-rate loan to a new property if you move house. The criterion is that the loan-to-value ratio for the fixed-rate loan in the new property must be the same or lower than when the loan was granted.