Inquiry Regarding Minimum Income Necessary for Home Purchase in Denmark by 2025 (Mapped Out)
In Denmark, the housing market is witnessing a shift as changes to tax rules and declining interest rates are making it easier for individuals to secure a loan for a mortgage.
According to recent data, the 'model family' – consisting of two adults, two children, one car, and sufficient savings to cover 5% of the house price – is expected to have 16,900 kroner left over each month after housing expenses. This amount covers food, everyday purchases, holidays, and leisure.
The interest rates paid on variable rate mortgages have generally fallen, offering significant savings compared to a year ago. This reduction in interest rates, combined with increased wages, has more than offset the increase in house prices, as stated by Jeppe Juul Borre, senior economist at Arbejdernes Landsbank.
The average income required for mortgage approval in Denmark in 2025 generally follows the guideline that the total loan should not exceed four times the gross annual income. For instance, to get a mortgage of around 2 million DKK, a gross annual income of approximately 500,000 DKK is needed. Banks also estimate affordability by ensuring that monthly repayments do not exceed roughly 30% of household income.
While there is no detailed breakdown by specific locations within Denmark in the 2025 data, the four-times income rule is a general bank standard nationwide. Additionally, the minimum salary threshold for certain work and residence permits increased slightly in 2025 to around 514,000 DKK per year from 487,000 DKK in 2024.
Regarding changes from the previous year, the house price to income ratio in Denmark had been declining for two years before rising slightly in 2023. This indicates some fluctuation in housing affordability. However, incomes continued to grow, somewhat offset by higher mortgage interest rates which made credit more expensive for buyers. This means the income needed for mortgage approval may have increased somewhat due to rising costs despite relatively stable borrowing capacity guidelines.
The European Central Bank and Denmark's National Bank have both lowered interest rates from just over 3% a year ago to between 2.2 and 2.5% today. This factor, along with the changes to tax rules, has made life a little easier for first-time buyers in the majority of the country.
Interestingly, the average income needed for a mortgage approval varies significantly between Denmark's 98 municipalities in 2025. For example, to buy a house in Vejle, you'll need an "average" household income of 790,888 kroner, which is 2,600 kroner less than last year. On the other hand, the family's calculations show that a total household income of 1,928,924 kroner is needed to get a mortgage in Copenhagen Municipality, an increase of 305,800 kroner compared to last year.
The review by credit institution Realkredit Danmark shows that house prices are generally rising, even compared to just a year ago. Despite this trend, a number of increasingly desirable towns, including Vejle, Herning, and Skanderborg, are included in the list of municipalities where it is easier to get a mortgage.
However, it's worth noting that each of the 18 municipalities in which it has become harder to get a mortgage are in the Greater Copenhagen area. Around half of that amount, 946,208 kroner, would be needed in Aarhus, an increase of around 6,000 kroner compared to 2024. The rural southern island Ærø requires a joint household income of 678,146 kroner, a decrease of 44,000 kroner compared to last year.
In conclusion, the declining interest rates on mortgages have made a significant difference in making it easier for individuals to secure a loan for a mortgage. While the average income needed for mortgage approval varies across Denmark's municipalities, the majority of municipalities (80 out of 98) have experienced improved mortgage approval rates over the last year.
- The decline in interest rates, combined with increasing wages and changes in tax rules, has encouraged more individuals to invest in Danish real-estate, especially in municipalities like Vejle, Herning, and Skanderborg.
- On a personal-finance note, the increasing affordability of mortgages, as indicated by the lower income required for mortgage approval in some municipalities, can be considered a boon for news about the nation's housing market.
- Sustained growth in incomes and the lowering of finance costs such as mortgage interest rates have contributed to positive news in the Danish economy, specifically in the areas of real-estate investing and personal finance.
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