Denmark’s Home-Buying Costs Decline to Lowest Level Since 2004

Danish home mortgages’ share of family income fell to its lowest level since 2004 as house prices and interest rates fell, Realkredit Danmark A/S (DANSKE), the country’s second-largest mortgage lender, said.

Monthly mortgage payments for a fixed loan fell to 14 percent of an average income for a family with children, Realkredit, the home-lending arm of Danske Bank A/S, the country’s largest lender, said today in an e-mailed statement. Mortgage payments for an adjustable-rate loan fell to 3 percent.

“The continuing weak economic development and the recent period of uncertainty on the financial market have sent interest rates down,” Christian Heinig, chief economist at the bank, said in the statement.

Realkredit Danmark introduced a new index to measure average home-buying costs based on monthly payments for an average 140-square-meter house that costs 1.67 million kroner ($290,460). Monthly payments were 5,430 kroner, if financed with a 3.5 percent fixed-rate loan, and 1,240 kroner if financed with a mortgage that adjusts yearly, the lender said.

To contact the reporter on this story: Frances Schwartzkopff in Copenhagen at fschwartzko1@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net