Statistical news focuses on the latest figures and trends in Danmarks Nationalbank’s statistics. Statistical news is targeted at people who want quick insight into current financial data.
Every fourth borrower still hasn't received a new variable mortgage interest rate
More than half of homeowners with variable-rate mortgage loans have had their interest rates adjusted one or more times since mortgage rates began to rise in 2022. However, by the end of August 2023, one of every four borrower still had a variable-rate mortgage that was set more than a year ago, amounting to mortgage debt totaling DKK 464 billion. This means that homeowners with variable-rate loans unaffected by the past year's interest rate increases currently have an average interest rate of 0,34 percent, excluding fees. In comparison, the average interest rate on new variable-rate loans disbursed in August 2023 was 3,9 percent, excluding fees. As a result, many homeowners may face a significant increase in interest rates in the coming years when their loans need to be adjusted.
A significant portion of homeowners' mortgage debt has a variable interest rate that was set more than a year ago
Note:
The outstanding nominal mortgage debt among Danish households with collateral in owner-occupied homes and vacation houses. The breakdown between variable interest rates adjusted within a year/over a year ago is based on data from the credit register. The total remaining debt of 1,771 billion DKK is derived from table DNRUDDK in the statistical bank. Nominal value, end-of-balance, 1400: Households, Fixed and variable interest, total repayments, all currencies, property category Owner-occupied homes and vacation houses.
It is especially F3 and F5 loans that are awaiting a new interest rate
At the end of August 2023, homeowners' total mortgage debt amounts to DKK 1.771 billion in nominal value. Of this DKK 1.771 billion, DKK 944 billion is subject to variable interest rates, with DKK 464 billion of that amount not having had their interest rates adjusted in the past year. This particularly applies to F3 and F5 loans, which therefore have interest rates significantly lower than the current rates for new F3 and F5 loans. These low-interest F3 and F5 loans must have a new interest rate that reflects the prevailing interest rate level no later than the end of 2027.
The interest rate adjustment for loans with variable interest rates that have not been adjusted within the past year is relatively evenly spread over the coming years, with debt totaling approximately DKK 110 to 125 billion each year.
In the period leading up to the new interest rate adjustment, most homeowners with loans can decide whether they want to continue with the same interest rate term or switch to a shorter or longer interest rate term.
Several homeowners may be facing the expiration of their interest-only period
Several homeowners with variable-rate loans are not only facing possible interest rate increases but also the requirement to start repaying their debt as the interest-only period expires in the future. However, recent credit tightening measures, including higher requirements for customers' disposable income, may make it more challenging for some homeowners to extend the interest-only period.