Danish banks offering "free" mortgages

jams100 · 10-01-2021 2:26am #1

I know banks are being charged negative interest rates but...

https://www.google.com/amp/s/amp.independent.ie/business/personal-finance/property-mortgages/free-mortgage-offers-put-the-focus-on-high-costs-imposed-in-ireland-39945245.html

I really don't understand this surely the risk is not worth the reward for banks? Whats the catch?

Where does this end? Are we heading towards deflation?

Geuze · 10-01-2021 4:06am

The Danish mortgage model is different than ours.

There are fees, the cost to the customer IS NOT zero.

See here:

https://www.askaboutmoney.com/threads/the-mortgage-system-in-denmark.178532/

Geuze · 10-01-2021 4:07am

jams100 wrote: »

Where does this end? Are we heading towards deflation?

We are in deflation now.

Consumer prices are falling, slowly.

https://www.cso.ie/en/releasesandpublications/er/cpi/consumerpriceindexnovember2020/

Atlantic Dawn · 10-01-2021 4:10am

We really need our laws changed where the current system of you pay feck all over 2 years you are eventually thrown out on your hole. The many are paying over the odds for the few, crooked system where no sensible lender will ever enter the market here again.

Geuze · 10-01-2021 4:12am

Note that the politicians want to make it more difficult to repossess.

So what you want will not happen.

Society has moved left.

Atlantic Dawn · 10-01-2021 4:17am

Geuze wrote: »

Note that the politicians want to make it more difficult to repossess.

So what you want will not happen.

Society has moved left.

A lot of them have significant skin in the game, they want to keep property prices at peak. A flood on the market of Covid related default properties would ruin a lot of them.

L1011 · 10-01-2021 4:24am

The claimed 0.7% fee to the bank in the middle in that AAM posting is probably similar enough to the real margin for Irish mortgage lenders. We already have ~2% for the lowest risk loans here, so taking in that margin and the direct costs that are recharged to Danish borrowers there isn't a huge amount more to push down without massive reforms of loan security.

Dafterss · 10-01-2021 5:11am

They make money on the bonds behind the mortgage

Jambonjunior · 10-01-2021 10:50am

Is it likely at any point that european wide mortgage services will exist?

namloc1980 · 10-01-2021 12:11pm

Jambonjunior wrote: »

Is it likely at any point that european wide mortgage services will exist?

Financial services can be offered across the EU now. However given Ireland's regulatory and legal environment, where it is extremely difficult to collect on mortgages in arrears and where we have a very casual approach to arrears, no European mortgage provider would ever enter the Irish market.

GazzaL · 10-01-2021 1:07pm

Geuze wrote: »

We are in deflation now.

Consumer prices are falling, slowly.

https://www.cso.ie/en/releasesandpublications/er/cpi/consumerpriceindexnovember2020/

That could easily turn the other way this year as shipping costs are adding massively to costs on imports, particularly from the Far East.

Danish banks offering "free" mortgages

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