[SoftTalker]

There is a straightforward way to value a mortgage loan because they are bought and sold every day.

The value calculation might have to change, as noted by fshbbdssbbgdd, but it's possible, since the Danish system calculates a value on the bonds that represent the mortgage. To me it seems like less overhead to forego the step of issuing the bonds and just make the mortgage work like the bonds would.

[munch117]

I'll admit that I'm in well over my head here. I'm no banker, and I've never had a realkredit loan myself. But here goes.

I believe the difference is that mortgages are tied to the individual property, and thus individually priced, whereas building bonds are part of an emission series. That means there's a liquid market, where all you have to do to pay back the loan is buy your bond type, not the particular bond for your property.

And that makes it different from a mortgage that is a contract between a single lender and a single borrower. There, you are stuck doing business with whomever owns the contract, and they can use that against you when negotiating the price.

[SoftTalker]

I'm not that experienced with it either, but a mortgage loan is just a secured loan. The primary value driver is that it's a stream of payments for a defined period of time, probably boosted by the fact that it's secured but also reduced by the fact that it can be paid off at any time. I'm sure there's more to it than that, but fundamentally it's just a debt that can be bought and sold for something close to its net present value of its future cash flows, like any other bond or debt.