What do foreigners need to know about buying a home in Denmark?
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Loading... - Josefine Hansen
- 10 Mar 2022
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For some foreign home buyers in Denmark, their first Danish home might not be the first home they have bought, and there will be a few differences in rules to take into account.
For others, Denmark might be the place where you take your first step onto the property ladder.
In either case, there are several rules and facets of the Danish housing market that are worth knowing when you set out.
I have savings, am a permanent resident in Denmark and want to buy a home. What should I do?
Unsurprisingly, the first step is to get approved for a mortgage or, in Danish kreditgodkendt.
“Then the thing to do is go down to a bank and get a købsbevis [mortgage certificate, ed.],” Mikkel Høegh, department director for real estate economics with Jyske Bank, told The Local via email.
“Here you will have a meeting at which you are pre-approved to buy a property up to a certain amount,” Høegh said.
The meeting, which takes place with an advisor from the bank, involves setting out a budget and looking at the applicant’s tax information to get an overview of their personal finances.
“Once you have been (approved) you can start house hunting,” he said.
The certificate is based on a calculation of “what amount you are in a position to buy a property for,” Lise Nytoft Bergmann, real estate economist and senior analyst with bank Nordea, told The Local.
House hunting can initially be done online, while buyers should talk with their families about how the see their future home, Bergmann advised.
“Whether it’s location that’s given highest priority, or the number of square metres, how modern a property… have these thorough conversations with the family about what you see as most important,” she said.
Are there any rules relating to buying a home that apply specifically to foreign nationals?
“There are no special rules for foreigners as such,” Høegh said.
Danish mortgages are based on the prices of the house being purchases, and buyers are approved to buy for that amount, he explained.
“The next step is then to find the property. When it’s been found, the property is what guarantees the loan. This means that the mortgage lender has a guarantee in the property. So it’s the property that is most important here,” he said.
“The buyer must pay at least 5 percent (of the price of the house) upfront,” he noted.
What if there’s a chance I might move back home (or somewhere else) in future? Should I still buy a house in Denmark?
“There some overheads which are connected to buying a house,” Bergmann said.
“They’re not entirely small, and so therefore it’s an advantage to spread these costs out over as many years as possible,” she said.
These include a registration fee which must be paid to the state of 1,750 kroner plus 0.6 percent of the purchasing price; and registration of the mortgage deed (pantebreve) of 1,730 kroner plus 1.45 percent of the purchase price. Read More...
