Jyllands-Posten reports that Danske Bank could have a big payday coming up as customers’ low-interest mortgages offered before the financial crisis are on the verge of expiring.
Until 2007 the bank offered a loan with interest at the national bank’s base rate, meaning that tens of thousands of customers are currently paying as little as 0.8 percent in interest.
Thomas Mitchell, the head of private banking at Danske Bank, confirmed that the loans expiring would have an effect on the bank’s bottom line. “I estimate that in the coming years there are 15,000 to 20,000 customers a year that have the old loan that is expiring,” he said.
“It is correct that this gives the bank additional earnings.”
John Norden , a partner at the bank comparison company Mybanker, estimates that Danske Bank could potentially expect an extra 500 million kroner in interest income when the loans are renegotiated. “There’s no doubt about it having been Denmark’s cheapest housing financing in a long time and it will be exciting to see what happens to customer’s conditions when the loans expire,” he said.