COPENHAGEN, Aug. 20 (Xinhua) -- Economic uncertainties created by Brexit and trade tensions are seen as major factors behind an economic slump that has hit the Danish housing market.
Danish banks are full of money, 507 billion Danish Kroner (over 75 billion U.S. dollars). Money that is sitting stagnant in the bank accounts of Danes making zero interest rate.
The Danish market needs more liquidity, and major financial institutions Nordea, Realkredit Danmark and Totalkredit are offering fixed-interest, 30-year mortgage loans at a staggering all-time low-interest rate of 0.5 percent.
Jyske Bank even introduces negative interest rates for private customers with more than 7.5 million kroner. The interest rate is minus 0.6 percent unless otherwise agreed, the bank reported here on Tuesday.
The banks believe through these historically low interest rates they will be able to make money from mortgage loan restructuring.
However, despite offering the lowest interest rates in Danish financial history, Danish homeowners are not rushing to add an additional loan to their present home loans.
Many customers are concerned about what restructuring of present loans might entail.
"We are in the process of a huge conversion wave, and the banks are of course also very interested in talking about that. Because they make good money every time a new loan is taken up," explained Morten Bruun Pedersen, a senior economist at the Consumer Council, to Danish news Channel TV2.
