Denmark is offering homeowners 20-year loans at a fixed interest rate of zero, according to Bloomberg. Customers at the Danish home-finance unit of Nordea Bank Abo can now get mortgages that carry a lower coupon than benchmark U.S 10-year Treasuries.
- In 2012, Denmark drove their main rate below zero to defend the krone’s peg to the euro, and since then, homeowners have enjoyed continuous falls in borrowing costs.
- Denmark banks first issued 20-year bonds with 0% coupons a few years ago, as investors looking for a safe place to put their money drove down rates in the mortgage-backed covered-bond market.
- The rate falls in Denmark come at a time central banks shy away from rate hikes, with analysts predicting no rate increases this year.
Denmark is known as the country with the longest history of negative central bank rates.