New Danish rules make it easier to compare mortgages

New rules to be introduced on October 1st will see all banks and lenders be asked to include a standardised summary in their mortgage offers.

New Danish rules make it easier to compare mortgages
File photo: Mathias Bojesen/Ritzau Scanpix

The new summaries which lenders will be required to provide will include five key metrics which customers will be able to use as a basis for comparison, broadcaster DR reports.

Summaries will include the following five key details of mortgages:

  • The monthly repayment (before tax) for the first 12 months of the loan
  • The fee taken by the bank or financial institution for initialising the mortgage
  • How much customers will be paying in interest and fees to the lender during the first 12 months
  • The overall repayment for the entire mortgage
  • The interest and annual costs as a percentage

The Danish Competition and Consumer Authority (Konkurrence- og Forbrugerstyrelsen), a government agency, said that the purpose of the new requirement is to make it easier for consumers to compare offers and thereby increase competition on the housing market.

READ ALSO: ‘Prove you’re going to stay’: The challenges of buying a home in Denmark as a foreigner

“This is a market where customers often find it difficult to understand their loans and therefore take banks at their word,” the agency’s office manage Flemming Steen Nielsen told DR.

“Many customers do not thoroughly research the market and competition has therefore not been quite as well-functioning as one might like,” he added.

More understandable information would increase buyers’ interest in the market, encouraging them to look for more offers before making a decision, meaning lenders have to compete more for their custom.

“Prices and services for the consumer are thereby improved,” Nielsen said.

A number of schemes have previously been introduced to simplify the mortgage market for customers, but the new summary, which is introduced on October 1st, is the first to ensure all offers include a standardised summary with the same key figures.

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Can foreigners buy a summer house in Denmark?

Summer houses in Denmark are a hugely popular destination for those who want to vacation without going abroad. Can foreign nationals buy them in the same way as permanent homes?

Can foreigners buy a summer house in Denmark?

Many people in Denmark spend their holidays living in summer houses, properties in which residence is not usually permitted year-round.

Rules preventing permanent use are in place to ensure summer house areas remain recreational in nature; to limit new construction in valuable and uninhabited coastal areas; and to protect natural landscapes from wear and tear.

READ ALSO: Summer houses in Denmark: What are the rules and when can you live in them?

While renting is a popular choice, owning a summer house is also relatively common and may be a financially viable option, depending on your budget and plans for vacationing and use of the property. 

Foreign nationals who have lived in Denmark for less than five years are required to apply for permission to buy real estate with the Ministry of Justice’s Department of Civil Affairs (Civilstyrelsen). This also applies to Danes who have lived abroad.

Foreign nationals looking to buy property can face additional challenges, including minimum residency requirements and banks asking for a higher down payment on mortgages.


However, the Ministry of Justice’s Department of Civil Affairs (Civilstyrelsen) states that, for both permanent homes and non-permanent or seasonal dwellings like summer houses, foreign nationals can be given permission to purchase properties, even if they have lived in Denmark for less than five years.

The application for to acquire a seasonal dwelling (such as a summer house) can be found here. The rules can be explored in full detail here.

I have lived in Denmark for less than five years. Will my application be accepted?

Citizens of EU countries are normally exempted from residence requirements because of EU free movement laws. As such, citizenship and not residence or previous stay in Denmark is decisive and EU citizens can generally acquire real estate in Denmark.

However, if you want to buy a holiday home this does not apply and the five-year residence requirement takes precedence – regardless of whether you have EU nationality.

If you don’t meet the five-year rule, you can still be granted permission to buy a summer house if you are consider to have a “special connection” to Denmark.

This can take the form of close family in Denmark or professional, cultural or financial connections, or previous stays in the country. These are taken into account by the Justice Ministry when it reviews an application.

For companies, different rules apply to those for private individuals, and companies have more leeway to purchase property in Denmark.

However, companies are only allowed to buy holiday homes in Denmark for commercial purposes or to use them for year-round residence. These means rules for private individuals cannot be circumvented by purchasing the properties under a business.