They’re not negative with fees and they have a 10-year repayment period (apparently, they’re fully amortized). Effective interest over 10 years is about 11%, so the real rate is still positive at ~1% p/a. You’d be paying 923 per month per 100,000 borrowed if you took this loan.
(277000 / 250000) = 1.108
(100000 * 1.108) / 120 = 923.
They also have a 20% equity requirement … no 3%-down nonsense like the US is doing right now. Think of it more as a HELOC with a 10-yr teaser rate. The monthly payments are basically hard-money territory.
Denmark is an unusual case. The Danish Crown is pegged to the Euro, but they have a bond bubble going — investors are buying Danish bonds as a proxy for their currency in the hope that the Euro peg will be removed and the currency will rise dramatically.
Here’s a better explanation … it’s actually far more restrictive than most US loans:
Danish banks are also offering loans with 0% per annum for 20 years. Let’s assume that fees are the same, so we end up with about 1.5% p/a or 35% over 20 years. Repayment of a 100,000 loan is 135,000. Dividing by 240 months gets you 562/mo, which isn’t that cheap by US 30-year standards.
