Audio By Carbonatix
Investors in Denmark’s covered-bond market, the world’s biggest, will have to settle for lower coupons or find a new place to put their money as record-low interest rates trigger the largest remortgaging wave in well over a decade.
Property owners with around 110 billion kroner ($16.5 billion) in loans (the figure includes public-housing debt) told their banks by last week’s quarterly deadline that they will redeem the fixed-rate, long-term bonds backing their home loans, according to calculations by Realkredit Danmark, the mortgage unit Danske Bank A/S.
That’s the biggest wave of prepayments since 2005, Realkredit Danmark estimates, and it’s also multiples of the amount that generally gets refinanced in such auctions. Jeppe Borre, chief analyst at Totalkredit, estimates that borrowers usually prepay 20-40 billion kroner each quarter.
Homeowners are replacing bonds with coupons of 2 percent and above for securities with a coupon of 1.5 percent. That’s half the rate on 30-year U.S. government debt.
The development comes as central banks across the globe extend their policies of extreme monetary stimulus.
In Denmark, which uses interest rates to defend the krone’s peg to the euro, rates have been below zero for roughly seven years, which is longer than in any other country.
Latest Stories
-
NACOC arrests 3 suspects linked to Dutch fugitive drug kingpin
14 minutes -
Workers must complement AI skills with professional expertise to remain relevant – ALX Enterprise
26 minutes -
Companies that delay AI adoption risk losing market opportunities – ALX Enterprise
40 minutes -
‘The future is bright’ – Gyan backs Black Princesses squad after U-20 World Cup exit
46 minutes -
We should treat AI as an opportunity rather than a threat – ALX Enterprise
54 minutes -
Malta and Ghana set sights on practical AI partnership
57 minutes -
2026 U-20 WWC: ‘Not all wishes come true’ – Gyan inspires Black Princesses after elimination
1 hour -
‘I am not a magician’ – Zdravko Logarušić on Nations FC exit from Africa
1 hour -
Three nights. 28 titles. Ultimate history made
1 hour -
Ghanaian delegates at IYF 2026 could become bridges for stronger Russia ties – John Aggrey
1 hour -
Nigeria: Over 30 dead, 50 hospitalised after consuming alcoholic substance in Ondo State
2 hours -
UK lawmakers demand new law to address AI threat to human rights
2 hours -
WAFU B U-17 Girls Cup: Black Maidens depart Accra for tournament in Yamoussokro
2 hours -
Sweden’s center-left bloc narrowly ahead as election remains too close to call
2 hours -
GPL 2026/27: ‘We won ugly’ – Kotoko head coach unimpressed after Lions victory
2 hours