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.
Homeowners refinanced loans for DKK 243 billion in 2022
Danish homeowners bought back fixed-rate callable mortgage bonds for a total of DKK 243 billion in connection with refinancing of their home loans during 2022. Buybacks related to refinancing rose steadily throughout 2022 in line with interest rate developments and peaked in the 4th quarter with DKK 70 billion.
Volume of refinancings peaked in Q4 2022, but appears to be slowing in early 2023
Note: Blue bars: The amount of fixed-rate mortgage debt that Danish home owners have bought back in connection with loan refinancing. Latest observation is Q4 2022. Gray bars: Total amount of repurchased fixed rate call-able mortgage bonds (all sectors). Values are given in nominal value. Note that data for the 1st quarter of 2023 covers the period 01-01-23 to 03-24-2023.
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Development more subdued in beginning of 2023
Homeowner buybacks as a result of refinancing are a subset of the total buyback of fixed-rate mortgage
bonds. In 2022, home owners’ share of buybacks has remained stable at just over 50 per cent in all quarters.
The preliminary figures for the 1st quarter of 2023 point to a significant drop in mortgage refinancings. The numbers indicate total buybacks of fixed-rate mortgage bonds for approx. DKK 61.6 billion (against
DKK 133 billion in the 4th quarter of 2022). Figures for home owners' refinancings in the first quarter of 2023 are only available at the end of the first half of the year.
Buybacks in connection to loan refinancing
Rising market interest rates in 2022 meant that the mortgage institutions issued new 30-year fixed-rate
mortgage bonds with higher coupon rates. At the same time, the already issued fixed-rate bonds with
lower coupon rates fell in price.
Homeowners with low fixed interest rates on their loans have thus had the opportunity to repay their loans at a low rate by buying back the underlying bond. This is because the current price at which the
loans can be repaid is reflected directly in the price of the investor's bond. The repayment is financed by a
new loan, which the homeowner thus converts to.
Buybacks of mortgage bonds, which do not relate to home owners' refinancing, mainly consist of property transactions by households and companies. The companies' refinancings have contributed to a lesser extent and accounted for DKK 60 billion in 2022.