When assessing the payment burden, it is important to look at both the payment burden in the short term and the long term.
Housing and Construction Authority loans can be shortened or extended for 5, 10, 15, 20, 25, 30 or 35 years.
Loans must be fully repaid in order to extend or shorten the credit period.
If payment difficulties assistance is requested and the relevant conditions are met, the loan can be extended by up to 30 years, but the maximum loan period may not exceed 70 years.
If the loan period has been changed before, the payer can request that the loan period be changed to the original number of maturity dates. Example: if a loan was issued for a period of 20 years and the borrower requested that the loan term be extended to 40 years, then the loan may be shortened again to 20 years, if the borrower so requests. This applies equally to loans with and without a settlement clause.
The effect of shortening or extending a loan
Shortening
- Higher monthly payment burden at first.
- Lower interest burden on the loan as a whole.
- Fewer due dates for payment.
Extending
- Lower monthly payments at first.
- Higher interest burden on the loan as a whole.
- More due dates for payment.
A fee is charged for each extension/shortening, according to the HMS tariff. It is added to the loan and will be collected on its next due date.
