Homeowners pay loans on time despite rate spike
Despite significant increases in interest rates in recent years, the majority of homeowners in Denmark continue to pay their mortgage loans on time. The delinquency rate, which indicates the portion of mortgage loans not paid as agreed, has remained virtually unchanged, marginally rising from 0.13% at the beginning of 2022 to 0.15% at the end of the first quarter of this year. Sune Malthe Thagaard, chief analyst at Totalkredit, attributes this trend to a strong Danish economy with low unemployment. Jeppe Juul Borre, chief economist at Arbejdernes Landsbank, also acknowledges the resilience of Danish homeowners amid challenging times with high inflation and significantly higher interest rates. However, Thagaard anticipates a slight increase in delinquency rates in the coming years as not all variable-rate loans have adjusted to the hikes, and homeowners may see rate increases of over 2.5 percentage points in upcoming auctions, even as general rates fall.