Are you missing a million for a house or car? The loan price depends on many different things, such as what security is provided, the loan type and the loan term.
It’s the total cost, so you have to add 1,000,000 to the amounts if you want to know how much you payback.
Mortgage loans: DKK 260,000 – DKK 980,000 (maturity 30 years)
Car loan: DKK 140,000 – DKK 800,000 (maturity 10 years)
Consumer credit: 140.000 kr. – 2 million kr. (Duration 10 years)
About the calculation
How much loan costs and how much a person can borrow is determined by a variety of factors.
We have not taken into account the formation costs, monthly fees, etc. The calculation is based on the monthly benefit that we know about each loan type.
With it, we can calculate the total cost.
There are thus simplifications of each type of loan. It is not certain you can borrow one million for the price stated in the example.
You can finance up to 80% of your homeownership with a mortgage loan. The remaining 20% can be financed through savings (5-20%) and home loans (0-15%).
In order to borrow DKK 1,000,000, the dwelling must therefore at least cost DKK 1,250,000.
There are many different factors that determine exactly how much a mortgage will cost. Therefore, we take as a starting point a very simplified calculation.
We know about what the monthly benefit is, and therefore we can calculate how much the mortgage loan will cost in total.
- Requires security: Yes, security is provided in the home
- Loan amount: DKK 1,000,000
- Maturity: 30 years
- OPEN: 1-3%
- Interest rate: 1-2%
- Monthly benefit: DKK 3,500 – DKK 5,500.
- Monthly costs: DKK 722 – DKK 2722.
- Yearly performance: 42 000 kr. – 66.000 kr.
- Annual costs: DKK 8,664 – DKK 32,664.
- Total amounts to be repaid: DKK 1,260,000 – DKK 1,980,000.
- Total costs: 260,000 – 980,000 DKK.
Thus, a whole mortgage loan costs about DKK 260,000 – DKK 980,000. This price does not require the use of interest-only payments.
It is not impossible to get a mortgage loan that is generally cheaper, but it depends on the price, the issuer of the loan, etc.
Of course, car loans are taken to finance a car purchase. There is usually security in the car, but it is also possible to take a car loan without security.
In this case, the loan will fall under the category of ordinary unsecured loans.
Cars come with many other costs than we take into account here, such as supervision, insurance, petrol, etc.
- Requires safety: Yes, security is provided in the car.
- Loan amount: DKK 1,000,000
- Maturity: 10 years
- OPEN: 5-10%
- Interest: 3-15%
- Monthly benefit: DKK 9,500 – DKK 15,000.
- Monthly costs: DKK 1,667 – DKK 6,667.
- Yearly performance: 114 000 kr. – 180.000 kr.
- Annual costs: DKK 14,000 – DKK 80,000.
- Total amounts to be paid back: DKK 1,140,000 – DKK 1,800,000
- Total cost: 140 000 kr. – 800.000 kr.
So it costs around DKK 140,000 – DKK 800,000 to take a car loan of one million. It is not quite next door, for example at Diba Billån you can borrow one million for DKK 358,293 with variable interest.
It is a fun thought to play with, and therefore we have included it in this article. You will in all likelihood not be granted a consumer loan of one million.
The largest consumer loans advertised in Denmark are half a million.
We do not know how many people take such large loans, but the high amount probably has more to do with the competition between the lenders in the market.
That role plays the maturity
The easiest way to change the loan price is by manipulating the maturity. A shorter maturity means a more expensive monthly service, but a lower price in the long term.
So you can get a cheaper loan by choosing a shorter maturity.