RIAD SC's correction of Norway example

[Bronte]

There is absolutely no need whatsoever for debt write-down. As long as the bank is prepared to accept reduced payments, the unpaid interest can be deferred. When the house is sold subsequently - after 2 years, after 5 years or after 20 years, the proceeds can be used to repay the loan. If the house has increased to €200k, the bank will lose the difference. If the house has increased to more than €300k, the bank won't lose.

Of course there is need for debt write-down if someone cannot afford the full mortgage. In any business if you fail you are out or you get debt write down.

Why would someone agree to reduced payments if at the end of 20 years they would gain nothing? They'd be better off leaving the house, paying nothing and starting again.

Deferred interest only puts people in a constant prison of debt.