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Households in Denmark Can Lock In Mortgage Rates of 1.5% for 30 Years

  • Nordea sees Danes racing to refinance bond-backed mortgages
  • Yields keep falling as Denmark sets world negative-rate record
Pedestrians sit on the side of the harbor canal opposite residential buildings in the Christians Havn district of Copenhagen, Denmark, on Thursday, March 13, 2014. Denmark's central bank, the country's financial regulator, and international credit-rating companies have warned since at least 2009 that so much one-year debt makes the $550 billion market vulnerable to a sharp decline in investor demand.

Photographer: Freya Ingrid Morales/Bloomberg

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Half a decade after rates first went negative in Denmark, the country is continuing to test records in ultra-low borrowing costs.

The latest example is in Denmark’s $470 billion mortgage-backed covered-bond market, the world’s biggest. Interest rates are now so low that Danish households can lock in to mortgage rates of 1.5 percent for 30 years. By comparison, the government of the U.S. pays a 2.75 percent coupon on its benchmark 30-year bond.