Normally, the good is saved and the bad disappears. Normally, it is the case that the financial market and capital forces will probably have to do so. Unfortunately, this is not the case for Danish mortgage loan.
There is a fight behind the scenes about the future framework for Danish mortgage loan. It is a battle that can mean billions in plus or minus for the Danes’ money. This can mean many more billions in lost consumption and growth in Denmark if it turns into a minus. Once again, your money is in play.
The biggest cost in your budget is likely to be interest expense. The Danes have more loans than the average in Europe, because we also have more property shares than the average. We tend to borrow more money because it is easy to get to it through its real estate. Is it so good or bad?
It’s great for Denmark. Over the past 200 years, it has shaped the Danish landscape. It has created growth and developed country and city. It has saved us through the financial crisis with relatively few scratches. We were basically the only country where, at the end of 2008, money was still lent out with real estate security.
Just note that when borrowing money for real estate, there are no loan systems in the world that are just as effective, flexible and interest-bearing as the Danish mortgage-loan system. Precisely because the system is so efficient, the capital requirement / requirement for the mortgage loan system is not as large as for banks – and so it should continue. We are even copied and looked at with envy from many other countries. It is a matter of course for us, but beware, because there are some who have seen themselves in the Danish mortgage loan system.
If it is to continue, then the system must be protected for unintentional officials in the EU, the international banking world (especially in England) and others – including the last knowing people from Denmark unfortunately. For some reason, what is found in small countries like Denmark is not good enough for the entire EU. But it is not a penny in your finances that is at stake. We have something that is good – the others don’t – no longer is it.
It is the one-year interest rate adjustment loans that it is crazy about. If they are judged to be negative, the mortgage companies must provide additional collateral which makes the whole mortgage system more expensive and, at worst, means that the basic idea of the mortgage system as a parallel loan system competing with bank loan prices disappears. It will thus be considerably more expensive to borrow money in their home. This will mean further decline in house prices! It is certainly not what we need right now.
Therefore it is extremely poor timing to remove interest deductions – especially if it only applies to mortgage loans – because it may seem like we do not believe in our own system. It will clearly be perceived as a confession in the EU. But there is nothing to admit here. The Danish mortgage loan system is the best financial system in the world. Understand it now!