Danish Government Proposes Easier Mortgages for First-Time Buyers
The Danish government aims to simplify mortgage access for first-time home buyers amid rising housing costs. Culture Minister Jakob Engel-Schmidt emphasized the need to support young people struggling to enter the property 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.”
Engel-Schmidt added that home ownership is generally beneficial both financially and personally, and the government wants to increase the number of Danes who own homes.
Proposed Mortgage Changes
- Extend the mortgage repayment period from 30 to 40 years
- Allow mortgages for up to 80% of the property's value
Currently, mortgages cover 80% of the property value with a 30-year repayment period. The remaining financing comes from a bank loan (banklån or boliglån) and the buyer’s minimum 5% downpayment (egenbetaling).
The government estimates that extending the repayment period would reduce monthly mortgage payments by about 560 kroner per million borrowed, equating to roughly 6,700 kroner annually.
“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.”
Author’s summary: The Danish government aims to make homeownership more attainable for first-time buyers by extending mortgage terms and easing downpayment requirements to reduce monthly payments.