Interest-only debt approaches 50 percent of Danish mortgages
Interest-only mortgage debt in Denmark reached 911.8 billion kroner at the end of August 2026, accounting for 48.7 percent of homeowners' total mortgage debt. The share has risen continuously since autumn 2024, according to Danmarks Nationalbank.
Closing the gap on amortisation
Interest-only borrowing has expanded each month since autumn 2024, bringing total outstanding volume to 911.8 billion kroner by the end of August 2026.
The proportion of interest-only loans now stands at 48.7 percent of all debt secured against owner-occupied homes and summer houses.
This persistent expansion is narrowing the gap with amortising loans.
Traditional amortising debt grew at a more moderate pace over the same period, primarily because borrowers continuously reduce their outstanding balance through regular instalments.
A high interest-only share is not unprecedented in Denmark: between 2009 and 2017, non-amortising loans consistently exceeded half of total mortgage lending.
A sharp geographic divide
Geographic disparities across Danish municipalities remain pronounced, even as the interest-only share rose in nearly two out of three municipalities since 2024.
The highest proportions are concentrated on Zealand, particularly in North Zealand, Greater Copenhagen, and Aarhus.
In Gentofte, Hørsholm, and Rudersdal, non-amortising loans exceed 70 percent of homeowner debt.
In contrast, Billund, Lolland, and Tønder maintain the lowest reliance on interest-only structures, with shares falling below 21 percent.
Flexibility masks regional risk
The return toward 50 percent interest-only borrowing reflects household demand for cash flow flexibility in expensive housing markets.
Yet heavy concentration in urban areas leaves borrowers more exposed to property price shocks.
Supervisors should monitor whether this trend undermines long-term household balance sheet resilience.