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READERS REVEAL: The lesser-known parts of Denmark that are great to live in

The likes of Copenhagen and Aarhus are popular for a reason – they’re great cities. But other parts of Denmark perhaps don’t get the love they deserve.

Wind turbines peek out above the mist on an autumn morning on Zealand. We asked our readers in Denmark to let us know what's great about their local areas.
We asked our readers in Denmark to let us know about their local areas. Photo: Mads Claus Rasmussen/Ritzau Scanpix

We asked our readers to let us know what’s great about the parts of the country they call home. Thanks for those who took the time to get in touch.

Most of the people filled in our survey live in Greater Copenhagen or elsewhere on Zealand, though some were located in other parts of the country.

With house prices high and rent in the major cities – particularly Copenhagen – more costly than anywhere else, outlying areas may find themselves gaining popularity.

Hvidovre, only 10 kilometres or so outside of Copenhagen to the southwest, is “central, cheap and close to the airport”, writes Scott Wilson.

“A few years back it was a bit of a backwater, now has its own very good beach, lots of new families moving and prices of houses are climbing,” Scott said.

The area would still benefit from a few more cafes, he added. Another drawback of the area is its high municipal taxes, he also said.

Were he to move, however, Scott wouldn’t swap Hvidovre for another part of Denmark. He’d stay within the same local authority but move closer to the coast, he told us.

If you plan on living within Copenhagen Municipality, you might not have considered Sluseholmen, a former industrial area to the south of the city centre across the harbour from Amager and close to the motorway bridge linking Amager and Zealand.

The area is less well-known than the ‘bridge quarters’ of Nørrebro, Vesterbro and Østerbro, but offers modern architecture and proximity to the harbour not found in the more central areas.

“The canals and location (close to city centre, nature, water and motorways)” are what make Sluseholmen a unique neighbourhood, wrote Edward Horton. The area lacks charging ports for electric cars, he observed.

Were he to move anywhere else in Denmark, Edward wrote that it would be somewhere else on Zealand.

People swimming in the sea near Middelfart. File photo: Michael Drost-Hansen/Ritzau Scanpix

Despite its small size, Denmark’s geography makes it difficult to find a spot with easy access to all other parts of the country. But the town of Middelfart on the west coast of Funen comes close to fitting the bill, wrote Tony, who moved there because it is the hometown of his partner’s family.

“The area is central to everything,” he wrote, but said that the town itself would benefit from more diverse consumer offerings.

There are “too many empty shops in the town centre and too many shops doing the same trades,” Tony wrote, adding that he’d move to Copenhagen if he could pick anywhere else in Denmark.

Herning has on occasions been host to some of Europe’s most famous football clubs due to the recent success of local side FC Midtjylland. Photo: Claus Fisker/Ritzau Scanpix

Another city that can boast an advantageous location is Herning, almost right in the centre of Jutland.

Jennifer wrote to us to praise the area, which she moved to when relocating due to her partner’s work.

“There is such a lot of natural history in the areas all around Central Jutland… it’s a great way to explore the rich Danish history. There are also the beautiful lakes around Silkeborg for fun summer activities like kayaks or paddle boards,” she wrote.

One thing she’d like to see more of in Herning is vegetarian options when eating out.

“Everything is meat,” she noted.

If she could move to another part of Denmark, Jennifer said she would choose nearby Aarhus or perhaps Copenhagen.

Cycling near Holbæk in Spring 2018. Photo Mads Claus Rasmussen/Ritzau Scanpix

Holbæk, on the coast of the Isefjord in the northwestern part of Zealand, is remarkable for its “beautiful fjord” and is a “nice friendly town”, wrote Bev Lloyd-Roberts.

Unlike anyone else who wrote in to us, Bev said she wouldn’t swap her adopted home town for any other part of Denmark.

But it could do with “more bins in the street” as well as “more benches to sit on to look at the fjord”, she suggested.

Do you agree with the places mentioned in this article? Do you have any suggestions you think we should add? If so, let us know – if we receive enough suggestions we’ll write a follow-up article.

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PROPERTY

EXPLAINED: How to restructure and reduce your mortgage in Denmark

Denmark's unique borrowing system has enabled thousands of people to restructure their mortgages this year, cashing in on high interest rates which have caused a drop in market value of covered bonds. We explain how it all works and how you can potentially pay off a sum of your mortgage.

EXPLAINED: How to restructure and reduce your mortgage in Denmark

How does the mortgage system work in Denmark?

Denmark has a unique mortgage model, which is regarded as one of the best in the world.

When you take out a loan to buy a house in Denmark, the bank finances the loan through a covered bond [Danish:realkreditobligation,ed.] What makes the model unique is that you as the borrower know exactly what covered bond is issued to finance the loan.

“This direct link is very special to Denmark,”  Peter Jayaswal, executive director at Finans Danmark told The Local.

“You can follow what the market price is for the bond that is funding your loan in the capital market. A German borrower for example has a mortgage by the German bank issuing a loan using a covered bond. But there is no link, so the homeowner doesn’t know what the bond is.

“In Denmark, you can see it exactly. You can go onto your bank website everyday and follow the market price. That means that we have this early repayment system where I as a borrower am allowed to prepay my loan by buying back at market price the bond that has funded my loan,” Jayaswal explained.

When interest rates are increasing, it means that the price on the bonds is decreasing and this is why thousands of homeowners in Denmark have bought out their bonds this year, at a low market value and paid off a portion of their mortgage. 

READ ALSO: Interest rates encourage Danes to restructure mortgages

So how can I make this early repayment on my mortgage?

The first thing to do is to set up a meeting with your bank so they can assess whether you will benefit from the drop in bond value.

The market price of covered bonds is well documented in Danish media but you can also follow them on your bank’s website or by asking for an appointment with your bank to assess your current mortgage.

“You may at some point in the past have taken out a mortgage of 1 million kroner with a one percent fixed interest rate. To keep it simple, let’s say the loan is without amortisation.  When you took out this mortgage, the bond was issued at 99 kroner meaning that the nominal debt will be around 1,010,100 kroner to give a 1 million kroner revenue.

“Today you can see the interest rates have increased and the price on the bond financing your loan is say 80 kroner. As a borrower you can buy the bond in the market at market price and prepay the mortgage loan. But you only need to take out a new loan of around 808,000 kroner to do this.

“So you can take a new loan out at 808,000 kroner and use this to repay your existing loan and reduce your debt by around 200,000 kroner. This transaction can be done simultaneously by your bank, so you won’t end up with two loans,” Jayaswal told The Local.

What about interest rates on my mortgage?

The interest rate you get for your mortgage can be fixed or variable and they mirror the prices investors pay for the bonds. 

Fixed rate mortgage

Today, the fixed interest rate is five percent. This means that if you decide to buy your bond at the lower market value, you will have to take out a new loan at a higher interest rate.

“Using the example of reducing your mortgage by 200,000 kroner by buying the bond at a low market value, every month you are now paying an interest rate of five percent fixed term, rather than your one percent you had before. So you are paying more each month for the benefit of paying off a portion of your mortgage early and the benefits will decrease over time. 

“You usually break even after around ten to fourteen years but the bank will calculate this for you,” Jayaswal said.

“If you know you’re moving in two to three years, it makes sense to get a new loan with a higher interest rate because you’ll have to repay the loan anyway when you move. But if you think you’ll be in your home a long time, keeping this loan, then you need the interest rate to decrease in ten to fourteen years.

“And that’s the problem because we must be frank and say we can do all the forecasts but in the end no one knows what future interest rates will be, so it has to be the decision of the borrower,” Jayaswal explained.

Variable rate mortgage 

The other option is to take out a variable interest rate mortgage to buy the bond, which today is around three percent. However this carries a risk, as the interest rates are adjusted on a regular basis. F3 loans, for example, are adjusted every three years, while F5 loans have adjustments every five years.

“Changing from a fixed to variable interest rate, to reduce your debt and avoid an increase in interest rate, comes with a risk that you don’t have a fixed rate for 30 years, so you are more exposed and that’s very important be aware of,” Jayaswal told The Local.

On Monday, the company Totalkredit, the largest provider of real estate loans for private homes, auctioned flexible loans with resulting interest rates exceeding 3 percent on the F1, F3 and F5 loan types. That means the interest on these types of mortgages will be at their highest for several years.

According to Finans Danmark, Danish home owners have repaid 337 billion kroner of their mortgages in the first three quarters of 2022. Many of these home owners have chosen to switch to variable interest rates. You can swap back to a fixed-rate mortgage at any time but you also have to be aware that these rates may have increased by then too. 

How do I decide which option to take?

“I always say to people, feel free to go to your bank, ask them to make the calculations for you, so you have the foundation to make a decision”, Jayaswal says.

“Some might think a 30-year mortgage at a fixed rate of one percent is great, especially because today interest rate is five percent. Others won’t mind paying a five percent interest rate for a few years, because they want to reduce their debt today and believe interest rates will decrease. It is up to the borrower to decide.

“It’s not that one option is better than the other, it’s that you have opportunities and this is unique in Denmark,” Jayaswal said.

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