Easing mortgage rules will only inflate home prices, Thomsen warns
Danmarks Nationalbank Governor Christian Kettel Thomsen rejected calls to ease mortgage lending rules at the Realkredittens Topmøde on September 21, 2026. Thomsen warned that relaxing borrowing limits would inflate home prices without addressing underlying supply constraints.
Demand stimulus misses the mark
Speaking to mortgage industry representatives, Governor Christian Kettel Thomsen cautioned against easing macroprudential mortgage restrictions.
He argued that looser credit standards primarily stimulate demand rather than resolve structural housing shortages, ultimately driving prices higher.
Today, homebuyers finance roughly one-fifth of the purchase price themselves, compared with 3 to 5 percent before the 2008 financial crisis, supported by the 5 percent down payment requirement enacted in 2015.
Furthermore, fewer loans are being granted outside standard lending boundaries.
Thomsen stressed that while an established working group will review administrative friction in the rules, broad deregulation would undermine borrower resilience during periods of elevated prices.
Capital pressures spread outward
Danish house prices track income growth over the long run, but regional divergence has widened.
In Copenhagen, the housing cost burden has reached elevated levels, with price pressures spreading outward as Aarhus recorded price growth of roughly 15 percent between August 2025 and August 2026.
Unlike other cities where construction met growing demand, the capital faces severe land constraints.
Thomsen stressed that structural supply expansion and regional transit must address housing imbalances rather than credit expansion.
Prudence over industry wishlists
The central bank takes a necessary stand by defending mortgage safeguards against industry lobbying.
Loosening lending standards would merely inflate urban prices without creating a single new home.
Solving affordability requires planning reforms and transit investment rather than expanded debt.