How to register a Danish Mortgage Loan

Created by Erik Åkerlund, Modified on Mon, 18 Mar at 4:27 PM by Maria Appelquist

Go to New deal and choose Danish Mortgage Loan

On Danish Mortgage Loans it is the most common to choose Amortisation Type 'Annuity (Recalculate)'. It means that when changes are made on the interest %, Treasury systems will recalculate the annuity (Ydelse) from that date and onwards.

You can read more about different Amortisation Type

Depending on the agreement there are different methods to calculate the annuity. If you click 'USE ROUNDED ANNUITY RATE', Treasury Systems calculates an Annuity rate that is used when calculated the Annuity. This rate will be rounded to 6 decimals.

(From our findings it seems to be used by Realkredit Danmark but it might not always be the case and could also be used by other Institutes)

If you click 'Use multiple day conventions', (common in agreements with Realkredit Danmark), Treasury Systems will use multiple day count conventions (ACT/360 respectively ACT/ACT ICMA)  to calculate the interest for the first period, if it is longer than the "normal" periods. This will only work if you have selected ACT/ACT ICMA as day count convention.

In the Tab 'Basics' you enter the Bond Price (this field is only for information purposes, not used in any calculations within Treasury Systems), and enter dates of the loan. 'Bond End Date' is defaulted to the loan end date but can be a later date as well. The 'Bond End Date' controls the calculation of the amortisation plan. 

In 'Amortisation Period', enter when the first amortisation will be paid.

Note! It is not possible to prolong the 'Bond End Date' later, unless you would like to regenerate the whole loan.

In the interest Tab you enter the fixing index (if floating) and the percentage for bidrag.

Enter the base interest (in the field 'Floating Interest'). 

'Spread' is the spread on the interest but is usually not used on Danish Mortgage Loans.

Some agreements stipulate that if there is negative interest, the Loan amount should then be decreased with the interest amount. If that is the case please tick the box 'Use Negative Interest Amortisation'.

In the tab Interest, enter the interest convention ('Day Count Convention') that should be used. 

(As far as we know it seems that 'ACT/ACT ICMA' is the one most commonly used, but please verify in your agreement).

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