Mortgage-free loan – Read more about the different options
An amortization-free loan is a loan where you do not repay initially. This results in a lower monthly cost during the period of amortization. It may be good for you if you know that you will have a tighter financial situation in the near future but that you will have more money in the near future.
What does an interest-free loan mean?
Taking an amortization-free loan means that you pay less at the beginning of the loan period, since you only pay interest on the loan at the beginning. When the amortization-free period expires, you start to repay and pay interest. How long the amortization-free period lasts depends on what you and the bank agree on – a year is a typical amortization-free period. Thus, you will never completely avoid the amortization.
Mortgage-free loans with Lite Lender Bank
We at Lite Lender Bank cooperate with several banks and lenders, but unfortunately we cannot offer you a completely amortization-free loan. We advocate a healthy economy and aim to help you with your personal finances, not to make it worse by passing on expensive loans. We work with over 30 different banks so that you can be assured that you get as low interest rates and as favorable terms as possible. You can borrow money without collateral with low amortization per month, all the way up to $ 600,000. Some of our lenders offer up to 1 year of amortization . Contact us and we will help you find the best loan for your purposes!
It is possible to take out a mortgage loan that is free of repayment for the first five years. To get such a loan, you need to move to a newly produced home and be the first owner. The rule on mortgage-free mortgages exists to stimulate housing construction in Sweden.
Before the amortization requirement was introduced in June 2016, it was not uncommon for the banks to offer mortgages that were completely amortization-free – but that is not the case today. If you buy a home that is not newly produced, you usually have to repay. The repayment requirement means that you must repay 1% of the total loan amount per year if the home loan amounts to 50-70% of the value of the home. If the loan is more than 70% of the value of the property, you must repay at least 2% per annum.
Disadvantages of amortization-free loan
As you postpone your amortization, the total cost of the loan will be higher. This is because you have to pay interest on the debt for the entire term of the loan, even during the period that is free of amortization. If you instead repay from the beginning, the interest cost will be lower due to the size of the loan constantly decreasing. If your finances allow, then it is better to start repaying already from the first month.
Benefits of amortization-free loan
It may be that your financial situation right now is more strained than you will be in the future. Your income may be lower than normal, or you may have one-off costs that you must pay. An amortization-free loan allows you to postpone the repayments until you have better ability to pay – this can be a great advantage.
Compare the banks with Lite Lender Bank
Whether you are looking for an amortization-free private loan or want to start repaying directly, you should always compare the banks’ loan offerings before you take out a loan. All banks specialize in different types of customers. It is therefore not possible to say that one bank is better than another when it comes to loans. Therefore, it is important to compare different loan offers to find the most affordable private loans!
If you as a private individual go to several different banks to compare the terms, they each take credit information on you. This affects your credit rating and can impair your ability to get a really low interest rate. If you choose to compare with Lite Lender Bank, only one credit report is made. The service is completely free of charge and you do not commit to anything when you make a comparison. Instead, Lite Lender Bank gets paid directly by the bank or lender when we help them get a new satisfied customer.