Facts about the Danish mortgage and housing markets
By 2006 there were 2.46 million homes in Denmark. Of these, 55% was privately owned. At the end of 2006, the mortgage banks’ outstanding bond debt for owner-occupied housing was DKK 1,120 billion (€ 151 billion) and DKK 1,454 (€ 195 billion) for residential loans in total.
In Denmark, loans to owner-occupied houses are typically granted as a combination of mortgage credit loans (about 90% of the total lending against mortgages in real property) and bank loans (the remaining 10%). Bank lending consists of simple bank loans with variable interest and a maturity between 10 and 30 years. The mortgage banks grant loans up to 80% of the property value.
The amount overdue for owner-occupied housing was 0.09% at the end of 2006. Also, the total mortgage payment was about DKK 60 billion (€8 billion), while mortgage payments of DKK 50 millions (€6.7 million) were not paid in due time. Compared to earlier times this percentage is extremely low. In the beginning of the 1990s more than 2% of loans was not paid in due time.
In Denmark, the residential mortgage loans amounts to 100.8% of GDP, which is rather high compared to the average of 49.4% in EU27.
Table 1: Key indicators for the mortage markets in the EU27 and Denmark
| EU 27 | Denmark | |
| GDP growth | 3.0% | 3.5% |
| Unemployment | 7.9% | 3.9% |
| Inflation | 2.3% | 1.8% |
| % owner occupied | 67.0% | 55.0% |
| Residential Mortgage Loans as % GDP | 49.4% | 100.8% |
| Residential Mortgage Loans per capita, €’000 | 11.6 | 40.9 |
| Total value of residential loans, € million | 5,713,615 | 221,970 |
| Annual house price growth (Euro area) | 6.5% | 16.2% |
| Typical mortgage rate (Euro area) | 4.5% | 5.2% |
| Outstanding Covered Bonds as % residential lending outstanding | 16.2% | 100% |
Source: EMF, EUROSTAT , ECB, National Central Banks
Notes:Typical mortgage rate Euro area refers to the APRC (Source: ECB). EU owner occupation rate average derived from EMF calculations based on latest available data. Denmark=2006.
