Danes Get 20-Year 0% Mortgages

Switzerland is only the 13th most dense country in Europe. Notably, the UK and Germany are more dense.

5% is more or less the long term average mortgage rate.

Owners generally keep a mortgage on their property (~65% of the property value) to off-set wealth and property taxes. Residences are taxed by their estimated rental values, which is treated as income. Interest payments are tax deductible, while the principal on the mortgage lowers the amount owned for wealth taxes.

The other issue is that most primary mortgages don't allow for early repayment, meaning that the principal either has to be payed off in full or refinanced once the payment period is over. Owners become conditioned to continuously roll over the principal on their primary mortgage.

To answer your question, because the expectation is that residential property will be mortgaged through out the entire ownership period, banks have to make sure that someone who can afford the payment on a 1% mortgage can also afford the payment on a mortgage refinance if and when rates eventually go up.

You can easily double it, because neither Germany nor UK have mountains covering half of the country.

As a Muslim, almost every "Shariah compliant" financing contract I came across is not compatible with Islamic Law (Shariah). Unfortunately, we're just taking modern parasitic and usurious financial contracts, and wrapping them under "Islamic" terms, and selling them as such. Any actual investigation of such contracts reveals that they're nothing but interest and usury in disguise. Islam seriously warns about this sort of behavior.

Under Islam, loans are are strictly an act of charity. There can be absolutely no contractual obligation for the lender to receive any benefit of any kind (monetary or otherwise) from the borrower in return for the loan. The borrower is encouraged to return more than the amount he borrowed, purely as a show of gratitude, but it can in no way be part of the contract, and in no way implied one way or another (like "off the record" sort of thing).

True Islamic finance is pro risk sharing, with no exploitative and parasitic practices that we see today. Want to start a business? Pitch your idea to an investor willing to put money into it, you put in the effort and he (or multiple investors) puts in the money. If the business succeeds, all parties benefit, if it fails, investors lose their money, and you lose the time and effort you put into it. Fair across the board. Zero debt.

Applying actual Islamic finance rules, we would immediately rule out things like stock shorting, put and call options, margin and leverage trading, mortgages, interest bearing loans, selling debt for debt, and so on. Now you can bet that Wall Street won't be happy, but time and time again those practices have proven destructive to the economy, and further increase the wage divide.

>You're implying "worrying about" or wanting to know what the monthly payment is on a loan is a bad thing and I don't understand why.

I stopped into a car dealer to look at a vehicle a couple years ago. I liked how it drove, could pay cash, but wasn't opposed to taking out a loan if I could get a better price overall (sometimes possible with fees banks pay to used dealers for getting a loan originated).

In my experience, they brought out a sheet of paper with a range of what the monthly payment would be. I asked about interest rate, and the sales guy had no idea what interest rates the payments equated to - but he could get me an exact payment after doing a hard pull on my credit. They resisted negotiating on the total cost of the vehicle, but were very willing to extend the loan out to make the payment exactly what I wanted/could afford.

I could see it wasn't going anywhere, told them to call me if they get serious about reducing the price, and left. I found a great car on the private market a short time later.