Refinancing F4T loan – F1 vs Flexkort vs Priority
21. januar 2017 kl. 20:51 #95656bk_99zForfatter21-01-2017 20:51
Sorry for the english, but my Danish is not good enough for this topic :).
Our F4T loan is up for refinancing – key point is that we are planning to sell our apartment and buy a house during the year, most probable timing during the summer. Therefore, would appreciate any advice on which loan option is best suited… as I am still trying to understand the various options. We currently bank at Danske bank / RD… and generally would like to stay there for various reasons. Outstanding loan amount is 1,8mDKK.
Options we have discussed:
Re-profile to F1T
– Low interest rates, only fixed for year – therefore, early redemption is limited, but still can be 20-40tDKK if redeeming after 6 months and rates trend upwards from what I understand.
Convert to Flexkort:
– Told conversion is ‘free’ (other than standard fees) due to price above 100 at the moment. It is still unclear to me, what the risks are for redemption – is it the same redemption risk as F1T? or do you redeem at 100 even if interest rates rise? It seems to be the best option if we believe rates will stay the same or go lower, but I really have a hard time understanding the key differences between F1 and Flexkort?? I know Flexkort is based on 3 year refinancing and 6 month IR changes. The interest rate changes is not a concern for me given timeline, but any clarity on early redemption would be appreciated!
Move to a priority mortgage bank loan:
– High interest rate of 2.9%, but also get high savings rate which would help us, as generally we are saving a fair amount each month. My calculations estimate cost of ~20tDKK in conservative estimate – if we were to take ownership and move around Oct timeframe.
Based on what Danske bank has shown me – the fees related to all three options are all fairly similar.
We are leaning to Flexkort – but need to understand mainly early redemption risks before deciding!
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