The European Central Bank raised the interest rates by 0,5% which led to the Danish National Bank doing the same thing. The EU interest rate is at 0% now, and the Danish interest rate is at -0,1%.
- The interest rate is the price for borrowing money. When the interest rates rise, your loan becomes more expensive. This would lead to a lower consumption that should tame inflation.
- The interest rate will be further raised in the near future to deal with the high inflation. As a side effect, house prices are expected to drop soon.
- If you have a variable loan you will end up paying a lot more than you do today.
