The National Bank of Denmark published new figures showing Danish private customers increased total housing debt to banks and mortgage banks by DKK 12.2bn in 2024, taking outstanding housing debt above the mid-2022 peak. The update also links a 1.2 percentage point fall in interest rates on new housing loans during 2024 to changes in mortgage choice, including rising use of F3 loans. Of the DKK 12.2bn increase, DKK 4.1bn was bank debt and DKK 8.1bn was mortgage bank debt, with debt rising through the year after a first-quarter decline. The bank notes that repayments on mortgage loans have been lower in recent years because higher interest rates have increased the interest share of instalments. The average interest rate on new housing loans fell to just under 4% including contributions in December, but the average rate on households’ total outstanding housing debt still rose by 0.1 percentage points in 2024, driven mainly by rate resets on loans with interest rate fixation of three years or longer. Households took out 129,000 new mortgage loans (including conversions) worth DKK 249bn; fixed-rate loans accounted for around half of disbursed value, while F3 loans reached about 43% of new variable-rate mortgage lending by value in the fourth quarter, versus 13% for loans with three- or six-month fixation.
National Bank of Denmark 2025-01-28
National Bank of Denmark reports Danish households’ housing debt rose DKK 12.2bn in 2024 as F3 mortgages gained share
The National Bank of Denmark reported a DKK 12.2bn increase in Danish private housing debt in 2024, surpassing the mid-2022 peak, with DKK 4.1bn in bank debt and DKK 8.1bn in mortgage bank debt. A 1.2 percentage point drop in interest rates on new housing loans influenced mortgage choices, notably increasing the use of F3 loans. Despite a decrease in average interest rates on new loans to under 4% in December, the average rate on total outstanding housing debt rose by 0.1 percentage points due to rate resets on longer-term fixed loans.