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HOUSING

Interest rate cuts lead to new Danish ‘super loans’

As a knock-on effect of the Danish central bank’s repeated interest cuts defending the krone’s link to the euro, Danish homeowners are now being offered historically low mortgage loans.

Interest rate cuts lead to new Danish 'super loans'
Photo: Martin Ballund/Scanpix
Nykredit bank announced on Friday that it is creating a new 30-year mortgage loan with just 1.5 percent interest. Realkredit Danmark and BRF quickly followed with their own 1.5 percent loans. 
 
The move came one day after Nationalbanken cut its interest deposit rate — for the fourth time in less than three weeks — by 0.25 percentage points to -0.75 percent.
 
“Nationalbanken is turning the knobs on interest rates to defend the krone exchange and that is benefitting Danish homeowners and businesses,” Nykredit’s Sune Worm Mortensen told TV2 Finans
 
It was just a few weeks ago that Danish banks began offering two percent loans, which according to financial daily Børsen has set off the biggest loan conversion rush in a decade. 
 
“We can see that the interest fall is continuing. And we could very well see that on the two percent loans today,” Mortensen told Børsen. 
 
But even though the bank is now offering 1.5 percent loans, Nykredit is recommending that borrowers stick to the two percent loan so long as its market value doesn’t exceed 100. 
 
Nykredit expects that the new 1.5 percent loan will open with a market value of around 96.5 but warns that it could climb higher as a result of Nationalbanken’s latest cuts. 
 
Danish interest rates are determined by the supply and demand of the bond market. According to the Association of Danish Mortgage Banks (Realkreditrådet), “this is unique by international standards and doesn’t form part of the mortgage system of any other country in the world.”
 
The Association of Danish Mortgage Banks has a short film that explains Denmark’s mortgage system that can be viewed here

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HOUSING

Copenhagen nature area to be developed as city approves land sale

A part of the Amager Fælled nature area has lost its reserve status and can now be sold to investors, after a majority in the city's municipal council voted in favour of development on Thursday.

Copenhagen nature area to be developed as city approves land sale
Amager Fælled. File photo: Asger Ladefoged/Ritzau Scanpix

The 219,000 square-kilometre area, known as Lærkesletten, can be sold to developers who wish to build homes on the land, broadcaster TV2 reported.

The sale raises money needed by the city to pay for the new Metro lines, which opened last year, and was part of a political deal agreed in 2017.

City councillors from the Social Democrats, Social Liberals, Liberals, Conservatives, Danish People's Party and two independents voted in favour, while Red-Green Alliance, Alternative and Independent Green parties and one independent opposed.

Located on the southern edge of the natural area on island Amager, the area is frequently used by people from the city for cycling, running and walking.

“We have seen that nature and the environment are at the centre of the public’s perception of what’s important. They want real wild nature in Denmark,” Gorm Anker Gunnarsen, who represents the Red-Green Alliance on the city council, told news agency Ritzau.

An Epinion survey this week showed that 76 percent of people who live in Copenhagen are either partly or completely against development of the area.

Gunnarsen told Ritzau he still believes there is a chance of preserving the nature zone.

“We have the authority to withdraw a building permit in special circumstances,” he said.

An advisory public vote could on the matter provide the basis for this, he argued.

“This case will not then just rest on which party you are with, but also on your view of the individual case,” he said.

READ ALSO: Copenhagen natural area Amager Fælled gets new development plan

 

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