First-time buyers could soon access cheaper mortgages in Denmark, as the government prepares a housing package that would extend repayment to 40 years, allow more flexible credit assessments, and lengthen repayment on SU student loans. The proposals—expected before the 18 November 2025 municipal elections—aim to counter a near 25% drop in first‑time purchases in recent years.
What the 40‑year mortgage would change
The government signals a new 40‑year repayment option on realkredit mortgages up to 80% loan‑to‑value (LTV)—the standard cap in Denmark. By spreading instalments over a longer period, the monthly payment per borrowed million is projected to fall by about DKK 6,700 a year (~€900), or roughly DKK 560 a month (~€75). The remaining financing would still come from a bank loan and a minimum 5% cash down payment.
Longer SU loan repayment to improve credit scores
Alongside mortgages, the plan would extend the maximum repayment period on state student loans (SU‑lån) from 15 to up to 25 years. Officials argue that lower monthly repayments on student debt could strengthen a buyer’s creditworthiness, making it easier to pass affordability checks and access owner‑occupation earlier.
More flexible credit checks, including future income
The package points to greater flexibility in credit assessments, including a wider use of valuations and estimates and the possibility to consider future earnings—for example when a buyer has a signed job contract or clear income progression. The aim is to better reflect a household’s realistic repayment capacity while keeping core prudential safeguards.
Industry support—and warnings on prices
Mortgage and banking representatives have welcomed the 40‑year option as a way to broaden access for young homebuyers. At the same time, Danmarks Nationalbank and independent analysts warn that easing financing—without increasing housing supply—can push up prices and shift benefits toward current owners.
Policymakers say safeguards and implementation details will be critical to avoid over‑indebtedness and to protect financial stability.
Election timing and next steps
Housing affordability is a central theme in this year’s local elections. The housing package is expected to be tabled ahead of 18 November, with legislative follow‑up to define eligibility, risk limits and consumer protections.
If adopted, the measures would align Denmark with several European markets that already offer longer maturities, while preserving the core features of the Danish mortgage model—covered‑bond funding, robust collateral rules and the 80% LTV cap.
The plan would reduce monthly mortgage costs for first‑time buyers and soften student‑debt pressure, but the broader impact will depend on market supply, prudential design and the pace of local housing construction across major cities.
