Guide to mortgage lending limits in Denmark in 2026

When you are considering a home loan, you soon come across the word “lånegrænse” (lending limit). It is the largest share of the home’s value that you may finance with realkredit (Danish mortgage credit). The aim is to avoid too much debt relative to the price of the home. If the market falls, you are in a stronger position.

The lending limit is linked to the rules on debt factor (gældsfaktor) and variable interest rates: if you borrow more than 60 % of the home’s value and have a debt factor above 4, there are, as a rule, limits on which loans you can get. Together, the rules keep your finances robust, so that repayments and interest do not get out of hand.

Here you will find the standard figures for 2026 and the rules behind them. You also get worked examples, so you can see how the rules apply in practice.

Your credit approval is always assessed by the specific bank or mortgage lender you apply to. Rules change all the time. Check the latest information from Finanstilsynet (the Danish Financial Supervisory Authority), Nationalbanken (Denmark’s central bank) or your mortgage lender before you decide anything.

What is a lending limit, and which value is the percentage based on?

The lending limit is about how large a share of the home’s value you may borrow against through realkredit. The point is simple: the loan-to-value percentage is calculated from the lower of the cash price and the mortgage lender’s valuation. If the lender values the home below the purchase price, it is the lower value that sets your ceiling.

The mortgage lender may lend no more than the percentage of the value that the law sets for the type of home. You have to cover the rest with a bank loan or your own down payment. A concrete example:

• Purchase price: 3,0 million kr.

• Mortgage lender’s valuation: 2,9 million kr.

• Max. loan-to-value for owner-occupied homes: 80 %

• Max. mortgage loan: 80 % of 2,9 million kr. = 2,32 million kr.

You may be paying three million, but the mortgage loan stops at around 2,32 million because the valuation is lower than the price.

The lending value can be reduced if the home has obvious defects, such as a worn roof, or if it is in an area where homes are hard to sell. For owner-occupied flats, the lender also looks at the finances of the owners’ association. All of this is to reduce the risk of losses on lending.

Costs such as the land registration fee (tinglysningsafgift) and other transaction costs are not normally included in the basis for the mortgage loan. You therefore have to finance these expenses separately, through a bank loan or your own funds.

Standard lending limits for owner-occupied homes, holiday homes, cooperative housing and rental properties

Lending limits depend on the type of home. For owner-occupied homes lived in all year round, the mortgage loan may make up no more than 80 % of the home’s value. The limit is set out in section 5 of the Danish Mortgage Credit Act (realkreditloven). The rest is covered by your own savings or a supplementary bank loan.

Holiday homes and leisure properties sit lower, at 75 %. If you let your holiday home out commercially, the limit is 60 %. The reason is bigger price swings and higher risk in that market. The law therefore sets tighter limits to curb losses, both for the lender and for you as the borrower.

Private residential rental properties have the same lending limit as owner-occupied homes, 80 %. Agricultural properties are at 70 %, and office and commercial properties at 60 %. The limits are the same at all mortgage lenders, but an individual lender can choose to lend you less.

Cooperative housing (andelsbolig) works differently. As a private member of a housing cooperative, you cannot take out a traditional mortgage loan secured on your share. Financing is normally through a bank loan on its own terms, often with a higher interest rate and different limits than for owner-occupied homes. The association’s debt does affect your loan, though. As a rule, the down payment must be 5 % of the sum of the share’s price and your proportionate share of the association’s debt.

The rules behind the standard limits are based on legislation and the practice of Finanstilsynet (the Danish Financial Supervisory Authority). They are updated from time to time, so always double-check the latest product sheets or guidance from your mortgage lender before you apply.

How the loan term and interest-only periods relate to lending limits

Mortgage loans are about more than the lending limit. The loan term and interest-only periods shape your everyday life and your disposable income.

For private homeowners, the term is often 30 years. That gives you a long time to repay the loan and keeps the monthly payment lower. Commercial and rental properties usually get a shorter term, because lenders consider the risk to be higher and want faster repayment or more security.

An interest-only period is something many people choose to get a lower monthly payment for a while. Under the Danish Mortgage Credit Act, an ordinary mortgage loan can be interest-only for up to 10 years of its term. As a rule, this requires that your finances could also carry a 30-year loan with a fixed rate and repayments. A high debt factor or a large share of variable-rate borrowing makes approval harder. Location also plays a part. If the home is in an area where homes are hard to sell, or where price trends are uncertain, the credit assessment becomes stricter.

You will feel the effect on the monthly payment in your budget. With a loan of around 2-2,5 million kr., an interest-only period typically saves you several thousand kroner a month in the first years compared with a loan with repayments. The amount depends on interest rates now and in the future, though, so do the maths for your own situation.

Keep an eye on the refinancing risk, especially if you combine a short fixed-rate period or a variable rate with an interest-only period. If interest rates rise, your payment can shoot up.

It all works together. Lending limits set the ceiling for how much you may borrow. The term determines how long you take to pay it back. An interest-only period gives flexibility but increases the risk if interest rates or your finances change.

A debt factor of 4 and your ability to pay affect how much you can borrow

Your debt factor (gældsfaktor) shows how large your total debt is relative to your household’s income before tax. Think of it as a figure that quickly reveals how stretched your finances are. If the figure gets high, banks and Finanstilsynet become sceptical.

As a rule, Finanstilsynet regards a debt factor above 4 as high. That does not mean a stop sign at exactly four times your annual income, but banks and mortgage lenders take an extra critical look at loans when you are close to it or above it. Variable rates and interest-only periods increase the risk over time, so the requirements are tightened, especially if your disposable income is already low after fixed expenses.

The limit is not set in stone. If you are granted an exemption, it is typically because of strong circumstances such as large savings, a low loan-to-value ratio on the home or a very stable income. The lender must be able to show the supervisory authority why the loan is still prudent.

An example: a household earns 650.000 kr. a year before tax and owes a total of 3.000.000 kr. Debt factor: 3.000.000 / 650.000 ≈ 4,62. That is above 4. If the household also borrows more than 60% of the home’s value, the bank cannot, as a rule, offer a variable rate that is reset more often than every five years, and an interest-only period requires a fixed rate. The bank can also cap the loan or require a larger down payment.

The banks’ own rules on minimum disposable income also matter. They typically expect a fixed amount per adult and a smaller amount per child to be left over each month for ordinary expenses once the home loan and fixed outgoings have been paid.

• Debt factor = total debt / gross income

• Finanstilsynet regards a debt factor above 4 as high

• A high debt factor makes variable rates and interest-only periods harder to get

• Banks can grant exemptions with a documented justification

• Minimum disposable income affects your borrowing options

Variable or fixed rate under Finanstilsynet’s guidance and bank practice

A variable rate often sounds cheap at first, but Finanstilsynet clearly warns against high debt combined with short fixed-rate periods and interest-only loans. That combination makes your finances vulnerable, because a rise in interest rates quickly hits your monthly payment.

If interest rates jump by 3 to 5 percentage points, your payment rises sharply. For some people, the budget is squeezed so hard that there is no room for unexpected expenses. That is exactly the risk the banks test for.

That is why the bank stress-tests your finances. If you want a variable rate or an interest-only period, your finances must, as a rule, be able to carry a 30-year loan with a fixed rate and repayments. If they cannot, the bank cuts the loan amount or changes the loan type. If you have a debt factor above 4 and borrow more than 60% of the home’s value, you can, as a rule, only get a variable rate with repayments, and only if the rate is fixed for at least five years. In that situation, an interest-only period requires a fixed rate.

The requirements are set out in the executive order on good practice for home credit (bekendtgørelsen om god skik for boligkredit) and in Finanstilsynet’s guidance on it. If the bank still grants a loan that departs from these rules, it must be able to justify why the loan is prudent. The higher the debt factor, the stronger the justification has to be.

A concrete example helps. The payment on a 2.000.000 kr. loan with a one-year fixed-rate period rises markedly if the interest rate goes up by four percentage points. The interest cost alone grows by about 6.700 kr. a month before the tax deduction for interest, because 4% of 2.000.000 kr. is 80.000 kr. a year. If the household cannot bear that extra cost, the loan will typically not be approved in that form.

Variable rates look cheap in calm times. Even so, Finanstilsynet and the banks set firm requirements, so that high debt does not topple your personal finances if rates suddenly jump.

Stricter rules in Copenhagen and Aarhus can lower the amount you can borrow

In Copenhagen and the surrounding municipalities, and in Aarhus Kommune, Finanstilsynet’s guidance on prudent lending in growth areas applies. Here, lenders must be extra careful when assessing whether you can afford the loan.

If your debt factor is above 4, your net worth must, as a general rule, stay positive even if the home falls 10% in value. If the debt factor is above 5, your net worth must stay positive even if the home falls 25%. If your net worth is negative, you must, as a general rule, pay down the debt as if you had a 30-year fixed-rate loan at a rate of at least 4%. The aim is to reduce the risk if interest rates rise or prices fall.

When valuing the home itself, lenders tread carefully in the hot markets. For example, they may value the home below the sale price or disregard part of the most recent price rises. The aim is to avoid over-lending based on overly optimistic price estimates.

If you invest in rental flats in Copenhagen or Aarhus, the requirements are stricter. The statutory lending limit for private residential rental properties is 80% of the value, but lenders can choose to lend less. You will typically need to document the rent level, allow for vacancies in your budget and provide detailed operating budgets before the loan is approved.

The rules are not fixed for ever. They shift with the market and with political decisions. They also vary between lenders. So check the latest executive orders and guidance, and talk to your mortgage lender for a precise answer.

Concrete examples: first-time buyer, holiday home, rental property and cooperative housing

Imagine a first-time buyer who wants to buy an owner-occupied flat in Copenhagen for 2,8 million kr. The mortgage loan can cover at most 80%, i.e. around 2,24 million kr. As a rule, you must put down at least 5% yourself as a down payment, about 140.000 kr., and the rest, about 420.000 kr., is financed with a bank loan. With an annual income of around 600.000 kr. and student debt of 200.000 kr., the debt factor comes to about 4,8 (2,86 million kr. of total debt divided by 600.000 kr.). So it is above 4, and since the loan-to-value ratio is above 60%, the bank can, as a rule, only offer a fixed rate, or a variable rate with repayments and a fixed-rate period of at least five years. An interest-only period requires a fixed rate.

If you are looking at a holiday home for two million kr., the lending limit is lower, at 75%. That gives a mortgage loan of at most 1,5 million kr. The down payment and costs must be covered by savings or a bank loan. Banks are often extra cautious with holiday homes, because prices can fluctuate more. If you have a debt factor above 4 and borrow more than 60% of the value, the same restrictions on variable rates and interest-only periods apply as for a year-round home.

Picture a rental property for five million kr. For private residential rental properties, the statutory lending limit is 80%, i.e. up to four million from the mortgage lender, but lenders can choose to lend less. The rest must come from equity or a bank loan. The bank will want to see documentation of net rental income, operating budgets and expected vacancies of five to ten per cent. A fixed rate or another form of interest rate hedging can protect against rate rises.

Cooperative housing (andelsbolig) works differently. The purchase price including improvements might be around 1,8 million kr. Traditional mortgage loans are not granted directly to the buyer. Instead, financing is through bank loans with loan-to-value ratios of around 80-95%, depending on the bank’s policy and the housing cooperative’s finances.

Interest rate rises hit hard. In these examples, a rise of three percentage points can push monthly payments up by several thousand kroner. That can tip your disposable income below the banks’ minimum or force changes to the loan mix, such as a smaller loan or a larger down payment.

How to check sources and calculations, and what to do next

Lending limits can seem confusing, but you can check the figures yourself. Start by finding the lower of the home’s price and the mortgage lender’s valuation. Use that as your basis. Then multiply by the relevant percentage, e.g. 80% for an owner-occupied home or 75% for a holiday home. Remember that the purchase costs have to be paid on top of the mortgage loan.

Use reliable sources. Finanstilsynet publishes guidance and news. Retsinformation.dk shows the rules in force. Product sheets and price lists from your mortgage lender show current rates. Interest rate trends from Nationalbanken (Denmark’s central bank) give an indication of where rates are heading. Together, they give you a good overview.

Also do a simple stress test. Add 3-5 percentage points to your interest rate assumption. Check whether your disposable income is still above the banks’ typical minimum requirements. Write down the figures and dates you use so that you can follow developments later.

Your application needs to cover your whole financial situation. That includes your type of income, how stable it is, savings, other debt and a budget for housing costs such as service charges and property tax. A clear overview strengthens your case.

Get in touch with your mortgage lender early. Ask for a specific financing proposal based on your details, and get the assumptions about interest rate, valuation and disposable income in writing. That makes it easier to compare offers now and when you follow up. Bear in mind that final credit approval depends on the lender’s assessment.

The figures and rules in this article were reviewed in October 2026. Always check the latest rules with the sources before you make a decision.