Main Types of Mortgage Loans
There are three types of mortgage loans on offer: fixed-rate loans, adjustable-rate mortgages (ARMs) and floating-rate loans with or without interest rate cap. All loan types are offered with an option of interest-only periods.
The Danish mortgage credit market is characterised by standard products. These are not tailored specifically to the needs of the individual customer. However, there are so many varieties of the standard solutions making it possible for the individual borrower to select precisely the loan that is best suited to his/her situation.
Standard products are cheaper than individually tailored solutions. This helps stimulate competition with regard to prices and products, and provides a very high degree of transparency. The transparency allows the borrower to quickly and easily compare the advantages and disadvantages of one standard product with those of another and replace a less fitting solution with a more fitting one. There are greater opportunities of tailoring individual solutions for the corporate market.
The main types of mortgage loans are: