Danish homeowners face a crucial decision when selecting a mortgage, especially with increased home sales during favorable weather. Experts emphasize that the ideal loan depends on individual financial circumstances and risk tolerance. Three economists recently shared their recommendations for borrowing three million kroner.

Two of the three experts favor a variable interest rate loan, specifically the F-kort (short rate) loan, citing its recent interest rate decreases. This loan type adjusts every six months, offering potential savings.

Brian Friis Helmer of Arbejdernes Landsbank highlights that the F-kort loan has become significantly cheaper compared to fixed-rate loans. As of July, the F-kort interest rate was just over 2.2 percent, while the fixed rate remained at four percent. He notes that he would choose it based on the fact that this is where the interest rate has fallen the most in the past year and believes that there may well be another interest rate cut in the fall.

However, Helmer cautions that this option comes with risks. Borrowers face interest rate changes every six months, and the loan carries a higher contribution rate without conversion options. He advises against it for first-time buyers with limited down payments, suggesting a fixed-rate loan for greater security against interest rate hikes. Helmer emphasizes that the F-kort loan requires a robust economy and is more speculative.

Ann Lehmann Erichsen, consumer economist at Sydbank, also prefers the F-kort loan for its low interest rate. She would use it to convert equity into consumption without paying installments or converting up and down.

Erichsen would recommend a F-kort loan even for young first-time buyers, but suggests shortening the grace period to ten years to prioritize paying off other debts. She acknowledges the need for a strong financial foundation to qualify for this loan type, but highlights the flexibility it offers for managing early-family expenses.

Mikael Mogensen, senior economist at Jyske Bank, deviates from the others, advocating for an F3 loan, which adjusts every three years. He believes the potential for further short-rate interest rate decreases is already factored into the F3 rate, making it an attractive option.

Mogensen also points out the significant interest rate difference between F3 and fixed-rate loans, offering substantial savings for borrowers willing to take on more risk. He suggests splitting the loan into two and paying off the outermost part of the loan to save on the contribution rate if borrowing 80 percent of the value of the home with a grace period.

Mogensen outlines four scenarios where a fixed-rate loan remains a suitable choice: expecting imminent interest rate increases, prioritizing peace of mind, inability to handle potential interest rate hikes, or failing to qualify for a short-term loan.