Banks have become more likely to approve first-time buyers for a mortgage in most of Denmark since 2023, but the average salary you need for approval varies wildly depending on location, a 2024 review from credit institution Realkredit Danmark shows.
The review, based on the average household income needed for approval for a mortgage for a house with 140 square metres of floor space, shows that the amount needed has fallen in 91 of the 98 municipalities in Denmark.
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Rising wages and falling interest rates are two factors closely related to this trend, Realkredit Danmark has previously said.
Data analysed by the lender shows that in the most expensive municipality, Frederiksberg, a household income of 2.36 million kroner per year is needed for approval on a mortgage for a home of 140 square metres in size.
There is a considerable drop to second-placed Gentofte, also in Greater Copenhagen, where the equivalent requirement is 1.9 million kroner, and third-placed Copenhagen Municipality with 1.6 million kroner.
In second city Aarhus – 26th on the list – an average household income of 940,000 kroner will get you a mortgage, while the cheapest municipality to buy a home, rural Vesthimmerland, has it at 690,000 kroner.
Looking at other major cities, Odense is at 36th place with the requirement at 838,000 kroner, and Aalborg is 38th (829,000 kroner).
The median municipality is 49th-placed Horsens. To buy a 140-square-metre home in the central Jutland town, you’ll need an average household income of 790,000 kroner.
The table in full can be downloaded here.
“There’s a difference of almost 1.7 million kroner nationally between where you have to earn the most and least to be able to buy a house – that’s a drastic difference,” Henrik Hauthorn Jensen, property market analyst with estate agent Home, said in a July 2024 press release.
Home says that several factors should be kept in mind relating to the way the figures have been calculated.
“Your finances might be different from the ‘model family’ used in the analysis, so it’s a good idea to get the advice of your bank advisor so you know how much you can spend on a house,” Jensen said.
A number of external factors have helped to pull the overall income requirement for mortgages down.
These include slightly lower property taxes after new rules were introduced at the beginning of 2024, and lower interest rates meaning fixed rate mortgages were set at 4 percent in 2024 rather than 5 percent, as was the case in 2023. Interest rates have since been further lowered in Denmark, meaning that the trend may have continued into 2025.
On the other hand, house prices are still rising in many locations.
The ‘model family’ used as the basis for Realkredit Danmark’s calculations consists of two adults and two children, owns one car and has enough savings to pay for 5 percent of the house price. The sample mortgage used is a 30-year, fixed-rate loan at 4 percent – the type normally used by banks when assessing mortgage applications.
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