Senior Loan

One of the benefits of retiring is that we get so-called “good time”. But the time will not necessarily be good as long as you get more of it. By good time, we really mean more time for what we most want to do, and then it’s about doing something we can afford. Do you want to give the children an advance on inheritance, build on the cottage, renovate the house, book the dream holiday you have always wanted, or pay down existing debt? If you are over 60 years old, and have saved up capital in housing, Senior loan is a good alternative for you.

How does Senior loan work?

Time to withdraw your savings? If you are over 60 years old and own your own home, you have probably saved up money in the home over several years, by repaying all or large parts of the mortgage. In addition, the home has probably risen significantly in value. With Senior loan, you can now use your own savings just as it suits you.

Senior loan means that you can release part of the savings that are tied up in the home, at the same time as you are guaranteed to live in the home for the rest of your life. With Senior loan, you do not pay interest or installments as long as you live in the home. Whether you want to pay off other loans, invite the whole family to a holiday or build a cabin, you now have every opportunity. For pensioners who need to make a living with a small amount of pension money, a Senior loan will usually be better suited than an ordinary mortgage.

The loan amount you receive is affected by the value of the home, location and your age. Income has no effect on the loan amount, which is an advantage for pensioners who do not have such a high income. The loan is paid out as a lump sum or as monthly payments, alternatively as a combination. The interest is added to the loan monthly. Senior loans are only repaid in the event of permanent eviction from the home (eg to a nursing home) or death.

Loan example:

The couple Kari (63) and Per (67) live in their own home in Bergen, which has a valuation of NOK 2.5 million. With Senior loan, they can then either get:

• 700.000 kroner as a one-time payment
• 4.460 kroner paid each month until the youngest turns 95 years old

This money can be used for everything from travel, experiences, retiring a little earlier than planned, giving children or grandchildren an inheritance advance, buying a new car, boat, monthly loan expenses or whatever you want.

Facts about Senior loans

• The loan can be terminated at any time
• If the value of the home is lower than the loan at maturity, the bank covers the loss
• Each year, you can deduct accrued interest expenses in the tax return and receive an additional tax benefit
• Senior loan can not be combined with other debt that is encumbered in the home