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Astronomical calendar for 2021. What phenomena will we observe?
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Since January this year, Nordea bank customers have w Denmark You can take out 20 year mortgage loan at a fixed rate of zero percent. It’s not brand new either. As it remembers BloombergA few years ago, 20-year zero percent loans were granted in Denmark. Now the lenders have come back with the offer – this is the first return on a similar product in history.
Denmark. A mortgage for 20 years at zero percent
Nordea (this bank was also active in our country, but in 2014 the Polish branch merged with PKO BP) is not the only bank introducing such mortgages. Nykredit Realkredit, the largest mortgage lender in Denmark, and Jyske Bank will also consider this move. Even Danske Bank, the largest Danish bank, does not rule this out.
How is that even possible? First, mortgage loans are structured differently in Denmark than in Poland. They are granted for a fixed period of time with a fixed interest rate (in our case it is usually a floating rate). Second, the lending bank issues so-called mortgage bonds for investors. The interest rate on these loans is 0%, which means that the bank will get it money “free”. This means that they can also afford interest-free mortgages. However, this does not mean that real estate loans are free for customers. The bank charges various types of fees, commissions, insurance, etc. However, this means very cheap loans. Bloomberg notes that the Danish mortgage-backed bond market is the largest in the world.
In addition to this offer, Danes can take advantage of 30-year mortgages with an interest rate of only 0.5 percent. and mortgage loan for 10 years with a negative interest rate of -0.5 percent. – Jyske Bank offers them. Again, there are some “catches” to watch out for – not just additional fees, but availability of credit – a loan with a negative interest rate has a limited amount, and the terms also depend on the size of your loan from your own contribution. We wrote about it in the following text:
The world of negative interest rates and the other side of the coin
The Danish central bank, which defends the level of the krona linked to its monetary policy Euro, cut its key rate below zero in 2012. No other country has held a negative interest rate for so long. It is currently -0.6 percent. (It was a record low of -0.75 percent). And soon it doesn’t seem to change anymore.
Main interest rate in Denmark Source: Central Bank of Denmark
“There is nothing in the data to suggest that we are about to raise interest rates” – he said in an interview published a month ago on December 9th Danish governor Lars Rohde. Although negative interest rates are viewed as a controversial solution by some economists, Rohde believes it is an effective tool in helping the economy. In his opinion, this leads to the creation of new jobs. foot unemployment in Denmark, although it has fallen, although it has increased to around 4% during the pandemic, it is still not high. The extremely low interest rates have also not led to high inflation, which remains below 2%. At this point it should be remembered, however, that the Danish central bank does not monitor inflation and unemployment like other central banks, including our NBP.
There is of course the other side of the coin. Negative interest rates also affect the bank deposit market. The above-mentioned Jyske Bank has this in their offer – that is, customers pay the bank to keep their money in it, and not just him, even though they refer to the highest deposits. As of January 1 of this year, Danske Bank (following the industry) decided to lower the threshold for negative interest rates on retail deposits. Reuters remembersthat Danske was the last of the large Danish banks to introduce this interest rate. It was last February, but then it was only about 1 percent affected. Clients of this institution. Negative retail deposit rates of 250,000 now apply. Danish krone (that’s just over PLN 151,000) from the previous 1.5 million. A negative interest rate of 0.6% is applied to such deposits. – That’s how much Danske pays to keep his money in the Danish central bank.
What is it like in Poland?
In Poland, too, interest rates have fallen significantly recently. Last year, the Monetary Policy Council cut it three times, the most important by a total of 1.4 percentage points; it is currently 0.1 percent. The President’s words caused great emotions towards the end of the year NBP in this case. Adam Glapiński said that while the current level of interest rates seems reasonable, cuts are possible in the first quarter of this year.
“The current interest rate level is appropriate and best corresponds to the current situation. However, further rate cuts are possible in the first quarter of next year. We are carrying out appropriate analyzes of possible circumstances and possible consequences of such a reduction at the NBP, “said the head of the NBP in an interview with” Observer Finansowy “.
Economists and experts pointed out that the time these words were spoken may indicate the president’s intentions – it should be a verbal intervention aimed at weakening Course Gold. For what? There were comments that the goal may be to improve NBP’s financial results.
Low interest rates mean that the interest rates on loans are falling. Expander Advisors’ lead analyst Jarosław Sadowski said November mortgage loan losses were a record low – it was 2.89%.
Mortgage Phrases in Poland. : Ródło: Expander, Däne NBP.
Is a mortgage rate close to zero possible? According to an expander expert, nothing is to be expected in the near future. However, there is a chance that they will be cheaper than now and the interest rate may drop below 2 percent. “Firstly, the NBP governor proposed lowering interest rates in the first quarter of 2021. Now the Central Statistical Office announced that December inflation was only 2.3%. cen increases the likelihood of a rate cut, which would lead to a decrease in the interest rates on loans. So there is a possibility that this year there will be a mortgage offer with an interest rate of less than 2 percent ”- argues Jarosław Sadowski.
This, of course, is also associated with low deposit and bank deposit rates. The average rate on ROR and savings accounts fell to 0.04 percent in November. For deposits, the average interest rate decreased to 0.58%. – In January last year it was 1.42 percent. In addition, customers have withdrawn a large part of the funds from deposits. “The transfer of a significant part of the savings to the accounts and the decrease in interest rates led to the fact that the interest paid to customers in November reached PLN 1.28 billion. This is the lowest amount since the data was published by the NBP (since December 1996). It is worth noting that it was at the time when we had the most money in banks in history (970 billion PLN) ”- writes Sadowski.
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