Danish Government Proposes Easier Mortgages for First-Time Buyers
Denmark’s government aims to simplify the mortgage process to help first-time home buyers amid rising housing costs. Culture Minister Jakob Engel-Schmidt highlighted the challenges young people face in entering the housing market.
“In recent years, we’ve seen that a great many first-time buyers have been unable to get onto the housing ladder. The number of first-time buyers has fallen by almost 25 percent, and many young people are left pressing their noses against the window, unable to get in.”
He emphasized the importance of homeownership, stating that it is both financially prudent and appealing. The government’s goal is to increase the number of Danes who own their homes.
“We need to do something about that, because we know that owning your own home is generally both financially sound and attractive. The government and I want more Danes to own their homes.”
Proposed Mortgage Changes
- Extend mortgage repayment period from 30 to 40 years
- Allow mortgages up to 80% of the property value
Currently, buyers finance their homes through a combination of a mortgage covering 80% of the property value, a bank loan (banklån or boliglån), and a down payment (egenbetaling) of at least 5% of the price. The longer repayment period is expected to reduce monthly mortgage payments by about 560 kroner per million kroner borrowed.
“The extended repayment period would lower mortgage repayments by around 6,700 kroner per borrowed million, equivalent to roughly 560 kroner per month,” said the government.
This plan targets increasing homeownership accessibility, especially for young and first-time buyers.
Author’s summary: The Danish government is planning to ease mortgage terms, including longer repayment periods and higher loan limits, to support young and first-time buyers in entering the housing market.