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Comment by aantix | Hacker News Reader

Can you get a Danish loan to fund the purchase of a foreign (ehem U.S.) residence?

Yes, however it's very difficult unless you have strong banking relationships in eg Denmark. Having a lot of money usually helps. I've routinely run across stories about prominent financial industry people that get mortgages in currencies they believe will drop in value. If you have the connections and financial heft to make it worth their time, you can get international loans. It's nearly impossible for an average person.

For example:

"Kyle Bass Is So Bearish On Japan, He Financed His Home In Yen"

"The Dallas hedge fund manager (no relation to the famous Bass family of Fort Worth) is so convinced the Japanese government's profligate spending will drive the nation to the brink of default that he financed his home with a five-year loan denominated in yen, which he hopes will be cheaper to pay back than dollars."

This bet may have paid off. The Yen/USD went from 80-90 to 1 in 2010, to 122 to 1 by mid 2015 with the Japanese move to debase.

https://www.businessinsider.com/kyle-bass-is-so-bearish-on-j...

This was my reaction too. If any Danish banks are reading this and want to make a juicy half percent, hit me up.

You'd be taking on currency exchange risk, as the Danes will want to loan you Euros but you'll likely be paying back the loan in USDs.

They'll most likely want to loan you some DKK, not EUR.

Denmark is not in the Euro, it uses the Danish Krone (DKK), though it is pegged to the Euro.

> You'd be taking on currency exchange risk

Swapping loans is fairly trivial, and would leave one with a mortgage rate competitive with American ones.

ELI5, how do banks make money if they don't charge interest?

Maybe they couple it with other services like the mortgage insurance or a life insurance or they request that your salary be credited to a checking account at their bank.

Assuming they make money, could they then go sub zero?

With fractional reserve banking it is even better, as credit effectively creates money out of thin air. This increases the overall supply of money in an economy, so banks can make money from other sources when that money is spent (e.g. credit card processing fees).

The loans are considered assets of the bank, so still increases it's value. And if the loan ends up in an account on their books (there's not that many banks in Denmark), they can then loan out that money again minus the fraction they need to hold.

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