Someone unfortunately thinks that you can not repay the loan, but of course you can. It will be more expensive to pay off the loan, but what does it really mean? You can evaluate it in 2 ways:
- How much bigger will the new loan be?
- How much does the benefit increase because of it?
The consequence of arriving too late with the termination is that you have to pay differential interest for an extra 3 months, and therefore the new loan becomes larger.
How much depends on where the loan is and what interest rate it has.
The figures show the extra cost of differential interest per million that you must pay, before and after the 29% tax benefit. Namely, differential interest can be deducted from tax.
If you get a loan offer on rescheduling now, the principal of the new loan will, be up to USD 9,125 larger per million if you need to repay a 2.5% loan in Realkredit Danmark.
And if you change 2.5% with 27 years’ residual maturity to 1.5% 27 years, it means that your monthly benefit will increase by up to USD 40 higher before tax and USD 35 after tax. Thus per. million you have to pay.
If your 2.5% loan is USD 2,500,000
It will cost you an extra benefit of USD 88 after tax per month. per month, but you still save USD 868 per month. month before tax and USD 309 after tax.
And then there is just that with the courses
After all, they change every day, and today, May 6, at 1 p.m. 12.45, the 1.5% rate is 30 years 99.37, with April 30 ending at 99.07.
This is a price improvement of NOK 3,000 per share. million, which can be deducted from the extra cost of differential interest of up to USD 9,125.
You can now have 2 approaches to the conversion options. Either you think the costs will be too high and then fail to convert, or that the increase in benefits will not be so great, and then focus on the possibility of converting to higher interest rates later. An opportunity that you might miss if the 3-month rates are lower than today.