Nation With Record Negative Rates Is Ill Prepared for Turnaround

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Homeowners in Denmark must brace themselves for bigger increases in mortgage costs than elsewhere in Europe once interest rates start to rise. But rates in Denmark’s AAA-rated mortgage market have been kept unnaturally low by foreign investors in search of yield during times of crisis. Once the global recovery makes other markets more attractive, a sizable share of them will inevitable leave, pushing Danish rates up. Nykredit, for example, expects both the Danish and the European central bank to keep interest rates unchanged this year. “That’s a recipe for making people blind to the risk of future rate increases,’’ Stramer said.

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