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New rules to increase competition between Danish mortgage banks

Staff Writer |
Danish mortgage banks will have a harder time pushing up fees after lawmakers agreed on Thursday new rules that make it cheaper for homeowners to switch to another bank when the fees go up.

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The sector, which includes units of Danske Bank, Nordea, Nykredit and Jyske Bank , has been criticised for recent hikes in fees, leaving homeowners with no other choice than to accept the increase or choose the costly option of switching to another mortgage bank.

Banks' income from fees on mortgage loans totalled 10.4 billion Danish crowns ($1.5 billion) in the first six months of 2016, according to the country's FSA financial regulator.

But new rules agreed by a broad range of parties in the Danish parliament on Thursday order mortgage banks to notify and explain price increases six months in advance and let homeowners switch to another mortgage bank at half the normal price.

Furthermore, the FSA has been given the authority to cancel fee increases if the explanation from the mortgage bank is not sufficiently detailed.

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