Fixed-rate bond loans
Cankcredit, of course, offers the traditional fixed-rate bond loan. It is the classic of all mortgage institutions. With a fixed-rate bond loan, you always know the size of your repayments and the interest rate on the loan. It is fixed for the entire term of the loan. This provides the most optimal protection of the value in your home as the price of the bond will fall relatively much as soon as the interest rate rises.
The bond loan can be used to finance up to 80% of your full-year residence and 60% of your holiday home. The remaining part of the housing purchase up to 95% of the property value can be financed with, for example, a mortgage in the bank.
You can choose a maturity between 1 and 30 years with 4 annual terms. Of this, you can choose up to 10 years of initial installment on the loan. This means that you must have started installing the loan as a minimum no later than 10 years after the loan was taken up.
You can redeem the loan at any time by buying the underlying bonds at market price – however, a maximum of 100, no matter how much above the 100 market price of the underlying bonds. You are not liable for any capital gains on loan repayment.
Short-term bond loans with variable interest rates
The so-called F-card loan is suitable if you want a fixed low rate of return on your loan and at the same time have enough air in the economy that the interest rate and thus the repayment amount may increase if the interest rate rises. On the other hand, the yield will fall if interest rates fall, as has often been the case since the beginning of the financial crisis.
As with the traditional fixed-rate bond, you can only finance up to 80% of a full-year residence and 60% of a holiday home. F cards are recorded with a maturity of between 1 year and 30 years at the end of each quarter and there is a possibility of interest-free for up to 10 years of maturity.
F card suggests that the interest rate is adjusted every six months – per. 1 January and 1 July. The interest rate is determined on the basis of the Cita6 rate plus a fixed addition to the owners of the bonds. The supplement ensures the bondholders a total interest rate that makes it interesting for them to buy the bonds. The additional percentage goes directly to the owners of the underlying bonds without any return to Cankcredit.
Technically, the entire loan is refinanced as the underlying bonds expire. The maturity of the bonds is determined by Cankcredit and will usually have a shorter maturity than the loan period. Therefore, they refinance by holding an auction of new bonds several times during the term of the loan. Refinancing is done without cost to you as a borrower.
In connection with the interest rate adjustment, the benefit is adjusted in proportion to whether the interest rate rises or falls. For periods, interest rates may fall below 0%, and in these cases, interest income – due to the negative interest rate – will benefit you in the form of additional repayments on the loan. It also happens even if you are in the repayment period.
However, you should be aware that you should pay tax on these interest income, so your post-tax benefit may be higher – especially during the first term of the loan. On the other hand, the loan is settled faster. So, over the full term of the loan, you will generally pay less to have your loan.
The same applies if the loan is accepted at above 100. You will also receive the loan at a price above 100 and will, therefore, be taxable on the date of payment. However, you can reduce the taxable value by offsetting borrowing costs in the capital gains.
F cards do not provide the same protection of the fair value of interest rate rises as a fixed-rate bond loan, as the price on F cards only drop slightly when interest rate rises occur.
The loan can always be redeemed at the market price. By refinancing, however, you can always repay the loan at rate 100, just give notice of two months notice before refinancing takes place.
Cankcredit Bank Mortgages
With a Cankcredit Bank Mortgage, you have the option to borrow a loan of up to 80% of the full-year housing and 60% of the value of the holiday home with certainty in the mortgaged property. The loan is recorded at a variable rate, determined quarterly on the basis of the Cita3 rate with an individual interest rate surcharge.
The mortgage lender serves as a cash credit, where you only pay interest on the amount you have used for your loan. The loan is paid to an associated account, which can also be used, for example. savings account or payroll account with the same interest rate as the lending rate. This allows you to have more money in your account than you have borrowed. If you know, you will get interested on the amount you hold over the loan amount and avoid being attributed to interest on the loan.
The interest rate is attributable to each quarter and there are 4 annual installments on installments. The maturity of the loan is between 11 and 30 years and it is possible to obtain repayment in the first 10 years of the loan’s maturity.
The loan can always be redeemed at price 100. In the event of bankruptcy of Cankcredit Bank, any net deposits (deposits minus any lending) may be up to NOK 750,000 secured by the Garantiformuen. However, you should be aware that Cankcredit Bank may transfer the mortgage loan to Totalkredit, which means that you can no longer offset your lending with your deposits in accordance with the applicable rules for the Garantiformuen. However, before the transfer takes place, the repayment of the mortgage can be done at the time of notice, which in practice should be easy to comply as long as the deposits on the linked account are higher than the loan amount.
Home equity Account
A Profit and Loss Account is a special form of cash credit, where you have provided the fair value in your home as collateral. You only pay interest on the amount you deduct on the overdraft facility, as well as a current commission in relation to the credit amount. The interest rate is variable and is attributable to lending each quarter, while it is attributable to deposits on an annual basis.
The loan is a way to gain access to the savings earned in the home. You can borrow up to 100% of the value of your owner’s or community housing and up to 80% of the value of your cottage or part-time farm. The non-life account has a maturity of up to 30 years but is renegotiated no later than 10 years after establishment. If you have a cooperative housing, you can maximize your account for 10 years at a time.
You can close the account at any time as long as the credit is not in use.
With a Cankcredit Mortgage, you have the opportunity to borrow for the financing of your mortgage, conversion, renovation or another purpose with certainty in your home.
You have the opportunity to borrow up to 100% of the value of the property. This allows you to use a Cankcredit Mortgage to finance that part of the loan for a new home that can not be financed through mortgage loans. In practice, this means that you can borrow up to 80% of the real estate value of a full year mortgage as a mortgage loan and the rest is financed with your home loan.
The loan is taken with a mortgage in the housing and the interest rate is variable. It is attributed per quarter and the mortgage can run for up to 30 years. It requires ongoing repayments and it is not possible to obtain repayment.
In return, you have the option to pay an extraordinary amount on the loan so it can be settled faster. However, you should be aware that extraordinary payments cannot be repaid, as in the case of a mortgage loan, where you can use the loan amount as a form of an overdraft.