Danish bank launches negative interest rate mortgage
This is all the more surprising given that inflation in Denmark is running ~1%/year.That means the bank is absorbing a real loss of 1.5%/year on the deal.Meanwhile, the housing market is roaring:https://tradingeconomics.com/denmark/housing-indexIt would be one thing to see negative rates in a declining property market and/or in a deflationary environment.However, negative rate mortgages are happening in what looks like a normal economy with low inflation and red-hot housing market.Somebody is very wrong about one or more of the following:- the future direction of the housing market- the future direction of interest rates- the future direction of inflationEdit:Google translate sheds some light. It appears that the Danish equivalent of "points' clouds the picture:> Total repayments before tax DKK 277,392 (on a DKK 250,000 loan) - of which total interest and contributions DKK 8,264 changes in the exchange rate will affect the size of the amount paid out.https://translate.google.com/translate?hl=en&sl=auto&tl=en&u...Low, but not negative.