Denmark Mortgage Calculator

Summary

Danish mortgages are funded through covered mortgage bonds and carry two separate charges: the bond interest rate and a bidrag (contribution fee) paid to the mortgage bank on top of it. The bidrag rate is tiered by loan-to-value and rises further if any part of the loan is interest-only (afdragsfrit). This calculator works out the loan-to-value ratio, the resulting bidrag rate, and a year-by-year schedule showing interest, bidrag, and principal as the balance falls.

How it works

1. Enter the property value and the loan amount to establish the loan-to-value ratio.
2. Enter the annual bond interest rate charged on the mortgage.
3. Enter the loan term in years and, if applicable, an interest-only period at the start of the loan.
4. The calculator determines the bidrag rate from the loan-to-value band, adding a surcharge for any interest-only years.
5. Once the interest-only period ends, the remaining balance amortizes on a standard annuity schedule for the rest of the term.
6. The year-by-year schedule re-checks the loan-to-value ratio annually, so the bidrag rate can step down as the balance falls.

Use cases

• Estimating the combined interest and bidrag cost on a new Danish mortgage.
• Comparing monthly payments across different down payment sizes before buying a home.
• Checking how much an interest-only (afdragsfrit) period adds to the bidrag rate.
• Seeing how many years it takes to drop into a lower loan-to-value band.
• Planning a household budget around the initial monthly interest, bidrag, and principal cost.
• Understanding how the bidrag charge changes separately from the bond interest rate over time.

Frequently Asked Questions