(Bloomberg) In Denmark’s $495 billion mortgage-backed covered bond market, another milestone was reached on Wednesday as Nordea Bank Abp said it will start offering 20-year fixed-rate loans that charge no interest.
The development follows an announcement earlier in the week by Jyske Bank A/S, which said it will start issuing 10-year mortgages at a coupon of minus 0.5%. Danes can also now get 30-year mortgages at 0.5%, and Nordea recently adjusted its prospectus to allow for home loans up to 30 years at negative interest rates.
© Bloomberg Danish 10-year government yield breaches minus 0.5%
“It’s never been cheaper to borrow,” Lise Nytoft Bergmann, chief analyst at Nordea’s home finance unit in Denmark, said in an email. “We expect this to contribute to driving home prices higher.”
Though good news for homeowners, Bergmann said the development is “almost eerie.”
“It’s an uncomfortable thought that there are investors who are willing to lend money for 30 years and get just 0.5% in return,” she said. “It shows how scared investors are of the current situation in the financial markets, and that they expect it to take a very long time before things improve.”
Can you see the problem here? The broker will gouge the front and back end, then the actual per month payment will go through the roof. Do I have to draw a picture of what happens next?
Banks just dont do this shit for free. Where are these lending institutions getting their money?
They will sell lots of homes to people who cant afford them.
Where are these lending institutions getting their money?
THEY CREATE IT OUT OF THIN AIR MY FRIEND, BACKED BY NOTHING BUT A KIKE PROMISE……