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.
Mortgage bonds are in high demand among households
Danish households have bought mortgage bonds for kr. 22 billion since mid-2022. This means that, for the first time in a long while, mortgage bonds have accounted for the bulk of households' total purchases of both foreign and Danish securities. The purchase has occurred alongside rising interest rates on mortgage bonds. The growing interest for mortgage bonds marks the end of a prolonged period of decreasing interest.
Households have especially purchased mortgage bonds since 2022
Note:
Accumulated net purchases, calculated at market value, made by the investor sector: "wage earners, pensioners, etc.," in both foreign and Danish securities. Investment funds include all stocks and bonds within these funds. Miscellaneous securities encompass government bonds, unlisted stocks, corporate bonds, and more. In June 2023, households' holdings were adjusted downwards by kr. 11 billion. This revision is implemented as a flow adjustment, meaning it occurs without an actual transaction. With the annual revision in September 2024, households' holdings will be adjusted for the period before June 2023.
Especially purchase of bonds behind adjustable-rate mortgages
Especially, bonds with maturities of up to 5 years, which are associated with adjustable-rate mortgages (ARMs), have been popular among households. They constitute 59 per cent of the total purchase of kr. 22 billion since the beginning of 2022, while fixed-rate callables and variable-rate mortgage bonds accounted for 38 and 3 per cent, respectively. Since the beginning of the 2nd quarter of 2023, households have bought ARMs with maturities of under 2 years for kr. 6 billion. These bonds have limited price risk compared to longer-term fixed-rate mortgage bonds and are, therefore, a viable alternative to bank deposits.
Few accounts with many mortgage bonds
With the recent purchases of mortgage bonds, households' ownership of Danish mortgage bonds has reached kr. 30 billion, distributed across approximately 40,000 investment accounts in Danish banks. There is substantial variation in the size of these holdings. The top 1 per cent of investment accounts with mortgage bonds collectively hold kr. 12 billion, which is equivalent to 39 per cent of Danish households' total holdings of mortgage bonds in banks. These top 1 per cent of investment accounts similarly accounted for about 39 per cent of net purchases of mortgage bonds since 2022, and on average, these investment accounts hold mortgage bonds worth kr. 30 million and other securities worth kr. 36 million. These numbers suggest that the purchase of mortgage bonds since 2022 has been made by relatively few affluent households.
Mortgage bonds make up 13 percent of households' portfolios
Households' ownership of Danish mortgage bonds was kr. 30 billion in September 2023. In addition to this, households hold mortgage bonds worth kr. 107 billion through investment funds, often in investment departments that invest in both stocks and bonds. The total mortgage bond holdings constitute 13 per cent of households' total investment of discretionary funds in securities, which amounts to kr. 1.052 billion.