Danish mortgage volumes drop by a quarter as property market slows
The number of mortgages issued in Denmark dropped by a quarter in January, according to new figures from Statistics Danmark.
The fall shows how much Denmark's property market has been slowed down by interest rate rises, with the number of homes being bought down at the same times as fewer people are seeking to restructure their loans.
"Significantly fewer homes are being sold at the moment, and therefore, it goes without saying that fewer are also visiting the bank to get an offer for a mortgage," said Sune Malthe-Thagaard, chief analyst at Totalkredit. "At the same time, there are far fewer homeowners with fixed-rate mortgages who want to restructure their loan."
READ ALSO: How to restructure and reduce your mortgage in Denmark
He said that as many as 200,000 home owners had already restructured their loans when interest rates started to go up in 2022, meaning most of those looking to do so had now done it.
According Finans Danmark, the trade body for Denmark's banks and lenders, 16,324 loan offers were made to individuals and companies in January, 25 percent lower than in January 2022.
Brian Friis Helmer, economist at Arbejdernes Landsbank, said he expected the low level of activity to continue until at least the end of this year.
"If we look into 2023, the number of loan offers will continue to be characterised by the lower activity on the housing market, while there is also no prospect of major restructuring waves on the horizon," he wrote.
Restructuring often happens when interest rates change, so that it can make sense for someone to have slightly higher interest rates but reduce the total size of their loan.
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The fall shows how much Denmark's property market has been slowed down by interest rate rises, with the number of homes being bought down at the same times as fewer people are seeking to restructure their loans.
"Significantly fewer homes are being sold at the moment, and therefore, it goes without saying that fewer are also visiting the bank to get an offer for a mortgage," said Sune Malthe-Thagaard, chief analyst at Totalkredit. "At the same time, there are far fewer homeowners with fixed-rate mortgages who want to restructure their loan."
READ ALSO: How to restructure and reduce your mortgage in Denmark
He said that as many as 200,000 home owners had already restructured their loans when interest rates started to go up in 2022, meaning most of those looking to do so had now done it.
According Finans Danmark, the trade body for Denmark's banks and lenders, 16,324 loan offers were made to individuals and companies in January, 25 percent lower than in January 2022.
Brian Friis Helmer, economist at Arbejdernes Landsbank, said he expected the low level of activity to continue until at least the end of this year.
"If we look into 2023, the number of loan offers will continue to be characterised by the lower activity on the housing market, while there is also no prospect of major restructuring waves on the horizon," he wrote.
Restructuring often happens when interest rates change, so that it can make sense for someone to have slightly higher interest rates but reduce the total size of their loan.
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