Mortgage customers are unhappy after the massive increases in the rates of contributions in recent years. Therefore, the mortgage credit industry has been in the defensive for a long time, but now there may be changes on the way. Realkredit Danmark (RD) has just launched a new mortgage loan.
Companies can compete on price or quality, for all industries. In some markets, the products resemble each other so much that they only compete on price. This is the case in the mortgage credit sector – all providers offer virtually the same products.
The problem is that mortgage providers are very reluctant to compete on the whole because customers are very much tied to their company. There has also been a common understanding in the industry of when to compete. It is, of course, completely unspoken, for everything else would be illegal.
Therefore, you pay too much for your mortgage loan
Predict signs of more competition on mortgage credit
In recent years, the BRF has been playing the naughty boy in the class by not raising the prices of much of the products when the other providers raised their prices. And it has actually given a little more competition in the market than we have seen before.
In addition, an independent mortgage company named Boligejernes Realkredit has announced its arrival on the market. It is an exciting initiative that is certainly needed in the market if it succeeds.
Customer-owned mortgage company on the way
The new mortgage loan from RD
What makes an old reputable mortgage company like RD when it is not possible to compete on price? It product develops and competes on quality instead, and it is also good for you as a customer.
RD’s new product is FlexLife, and is a 30-year variable rate and variable rate loan. This means that the loan can have a residual debt at maturity – but never more than 60% of the property value.
FlexLife is suitable for many different kinds of families who have an overview of their finances. It therefore requires advice before you can choose this product. In return, it gives you many opportunities to be flexible in your budget options.
You can only borrow up to 75% of the property value on the loan’s admission. If you borrow up to 60% of the property value, you have the option of a 30-year grace-free loan. All in all, FlexLife is a loan many Danish families can consider as part of their loan portfolio. Especially young families and retirement families with variable repayment options or savings needs can benefit from the new loan.
It may not be long before other mortgage companies are on the line with similar products – and then the market is back to the status quo. All in all, however, this development is an advantage for you as a borrower because it gives you more loan opportunities – and then it gives a little more competition in the mortgage market.