Default interest (morarente)
Also known as late payment interest, interest on late payment, statutory interest, renter ved for sen betaling, forsinkelsesrente, rentelovens rente
Default interest is the interest that runs on an overdue claim — as a starting point, Nationalbanken's lending rate plus 8 percentage points.
In practice
Default interest is the statutory rate for late payment, set out in Renteloven § 5 (the Danish Interest Act). It is fixed as Nationalbanken’s lending rate plus a margin of 8 percentage points, and the reference rate is adjusted twice a year — on 1 January and 1 July. If a claim runs across several half-year periods, the calculation must therefore reflect changing rates.
As a starting point, interest runs from the due date, where one has been agreed. If no due date was agreed, interest runs only from 30 days after you demanded payment.
Between businesses, a higher rate can be agreed. It is one of the most overlooked lines in a set of terms and conditions of trade — and one of the cheapest to put right.
Where it commonly goes wrong
- Interest is calculated on the total claim including fees. It runs on the principal.
- A single rate is used for the whole period. The reference rate changes every six months, and an interest statement built on one fixed rate will not hold up in the bailiff’s court.
- The terms and conditions say nothing about interest. Then the statutory rate applies — even if you would gladly have agreed on more.