Act on Mortgage Loans and Mortgage Bonds etc.

Act on Mortgage Loans and Mortgage Bonds etc.1)

Hereby is published the Act on Mortgage Loans and Mortgage Bonds etc., cf. Consolidation Act No. 315 of 11 March 2022, with the amendments resulting from Section 12 of Act No. 1546 of 12 December 2023 and Section 15 of Act No. 712 of 20 June 2025.

Chapter 1
Scope and Definitions

Section 1. This Act applies to mortgage bonds, covered mortgage bonds, covered bonds, and other financial instruments issued by mortgage credit institutions, and to the mortgage loans granted on the basis thereof. Furthermore, the Act applies to the issuance of mortgage bonds in this country by foreign credit institutions and to the mortgage loans granted on the basis thereof.

Subsection 2. For the activities of foreign credit institutions, cf. subsection 1, second sentence, only Sections 2-19 and 34-43 of the Act apply. However, for foreign credit institutions that are group-linked with Danish mortgage credit institutions, Section 20 and Section 21, subsection 5, also apply.

Section 1a. In this Act, the following terms are defined as follows:

1. Matchfunding: A system that ensures that payment flows between liabilities and assets maturing for payment are matched by contractual terms and conditions ensuring that:
   a) payments from borrowers and counterparties in derivative contracts mature before payments are made to investors in mortgage bonds, covered mortgage bonds, and covered bonds, and to counterparties in derivative contracts, b) the amounts received correspond in value at least to the payments to be made to investors in mortgage bonds, covered mortgage bonds, and covered bonds, and to counterparties in derivative contracts, and c) the amounts received from borrowers and counterparties in derivative contracts are included in the series with the series reserve fund or the group of series with a common series reserve fund until the payments to investors in mortgage bonds, covered mortgage bonds, and covered bonds, and to counterparties in derivative contracts, mature.

2. Outgoing net cash flows: All outgoing payment flows maturing on a day, including principal and interest payments as well as payments under derivative contracts linked to the issuance of mortgage bonds, covered mortgage bonds, and covered bonds, minus all incoming payment flows maturing on the same day for claims related to the cover assets.

Chapter 2
Mortgage Loans

Security for Mortgage Loans

Section 2. Mortgage loans are granted against registered mortgage on real estate in accordance with the rules in this chapter. Loans without mortgage on real estate may be granted to public authorities or against self-undertaking guarantees from a public authority as referred to in Article 129(1), first subparagraph, points (a) and (b), of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms.

Subsection 2. Mortgage loans may not be granted against security in the form of ownership deeds (ejerpantebreve) and indemnity deeds (skadesløsbreve). In cases where security for a mortgage loan is also provided by a pledge in movable property, indemnity deeds may, however, be used for the pledge in movable property.

Subsection 3. Loans where the deed of mortgage has been notified for registration, cf. subsection 1, first sentence, are treated as mortgage loans granted against registered mortgage on real estate if the necessary security has been provided for the final registration of the deed of mortgage and the institution obtains the finally registered deed of mortgage without undue delay. This applies only to loans granted on the basis of covered mortgage bonds.

1. The Act contains provisions implementing parts of Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (recast), OJ EU 2006, No L 177, p. 1, parts of Directive (EU) 2019/2162 of the European Parliament and of the Council of 27 November 2019 on the issue of covered bonds and public supervision of covered bonds and amending Directive 2009/65/EC and Directive 2014/59/EU, OJ EU 2019, No L 328, p. 29, and parts of Directive (EU) 2023/2864 of the European Parliament and of the Council of 13 December 2023 amending certain directives as regards the establishment of the common European access point and its functioning, OJ EU L of 20 December 2023.

Lobtidende A
2025 Published on 9 December 2025
18 November 2025. No. 1541.
Ministry of Industry, Business and Financial Affairs, Danish Financial Supervisory Authority, file no. 25-006844 CQ003394

Loan Terms and Amortization Profiles

Section 3. The maximum term is 30 years, cf. however subsection 2. When determining the loan term and amortization profile, account shall be taken of the expected depreciation of the security and the loan limits applicable to the security, cf. Section 5.

Subsection 2. The maximum term is 40 years for loans to general housing construction, youth housing, and private cooperative housing, provided that the lending is based on commitments for support under the Act on General Housing and supported private cooperative housing etc.

Section 4. Loans for owner-occupied homes for year-round use and holiday homes may not be granted, regardless of the security position, so that they are amortized more slowly than a 30-year loan amortized over the term with a payment constituting a fixed percentage of the principal (annuity loan), cf. however subsection 2.

Subsection 2. The requirement in subsection 1 may be deviated from within the loan term for a period of up to 10 years, observing Section 3, subsection 1, second sentence.

Subsection 3. For loans covered by Section 7, subsection 1, the institution may grant a grace period if a grace period has been started on the redeemed loan. The period mentioned in subsection 2 includes both the already passed grace period on the redeemed loan and the grace period on the new loan.

Subsection 4. For loans covered by Section 7, subsection 2, the receiving institution may grant a grace period if a grace period has been started in the giving institution. The period mentioned in subsection 2 includes both the already passed grace period in the giving institution and the new grace period in the taking-over institution.

Subsection 5. For loans covered by Section 7, subsection 2, or Section 152g, subsection 3, of the Financial Business Act, the giving institution is obliged to provide the receiving institution with information on whether the loan to be redeemed is included in a register in the giving credit institution, and information on the already passed grace period for the loan in question, if the customer has consented to this.

Loan Limits etc.

Section 5. Within a loan limit of 80% of the property's value, loans may be granted to the following property categories:

1. Owner-occupied homes for year-round use.
2. Private cooperative housing.
3. Private residential properties for rent, including free-care homes.
4. General housing construction.
5. Youth housing.
6. Elderly housing etc.
7. Properties for social, cultural, and educational purposes.

Subsection 2. Within a loan limit of 75% of the property's value, loans may be granted to holiday homes, cf. however subsection 4, no. 1.

Subsection 3. Within a loan limit of 70% of the property's value, loans may be granted to agricultural and forestry properties, nurseries etc.

Subsection 4. Within a loan limit of 60% of the property's value, loans may be granted to the following property categories:

1. Holiday homes rented out commercially.
2. Office and retail properties.
3. Industrial and craft properties.
4. Properties used for energy supply operations, including offshore wind turbines in Denmark's exclusive economic zone.
5. Properties equipped for directing data traffic in electronic communication networks.

Subsection 5. Within a loan limit of 40% of the property's value, loans may be granted to other properties, including undeveloped land.

Section 6. If the term of a mortgage loan is longer than the term of the underlying mortgage bonds, covered mortgage bonds, or covered bonds, and the bonds are fixed-rate and have a term of up to and including 12 months at the refinancing of the loan, the mortgage credit institution may only initiate the sale of bonds that are to replace the maturing bonds upon refinancing if the mortgage credit institution has a justified expectation that the sale can be carried out without the effective interest rate becoming 5 percentage points higher than the effective interest rate determined in connection with the most recent refinancing. This does not apply if the mortgage credit institution carries out a sale of a small amount of bonds with a view to clarifying whether the effective interest rate becomes 5 percentage points higher than the effective interest rate determined in connection with the most recent refinancing. If a sale cannot be initiated, cf. first sentence, and the maturing bonds mature, the term of these bonds is extended by 12 months. Upon the maturity of the bonds after the 12-month extension, new bonds must be issued to replace them. In this issuance, the first and second sentences do not apply.

Subsection 2. If the term of a mortgage loan is longer than the term of the underlying mortgage bonds, covered mortgage bonds, or covered bonds, and the bonds are fixed-rate and have a term from 12 to up to and including 24 months at the refinancing of the loan, the mortgage credit institution may only initiate the sale of bonds that are to replace the maturing bonds upon refinancing if the mortgage credit institution has a justified expectation that the sale can be carried out without the effective interest rate becoming 5 percentage points higher than the effective interest rate on a corresponding bond with the same remaining term from 11 to and including 14 months earlier. This does not apply if the mortgage credit institution carries out a sale of a small amount of bonds with a view to clarifying whether the effective interest rate becomes 5 percentage points higher than the effective interest rate on a corresponding bond with the same remaining term from 11 to and including 14 months earlier. If a sale cannot be initiated, cf. first sentence, and the maturing bonds mature, the term of these bonds is extended by 12 months. Upon the maturity of the bonds after the 12-month extension, new bonds must be issued to replace them. In this issuance, the first and second sentences do not apply.

Subsection 3. If the term of a mortgage loan is longer than the term of the underlying mortgage bonds, covered mortgage bonds, or covered bonds, and the underlying bonds are variable-rate and have a remaining term of up to and including 24 months the first time they are used to finance a mortgage loan, it applies that the interest rate at interest setting cannot become more than 5 percentage points higher than the most recently set interest rate and must remain unchanged for 12 months or until the next refinancing, if this is carried out within 12 months, unless a lower interest rate is set within the 12 months or before the next refinancing.

Subsection 4. For bonds covered by subsection 3, the mortgage credit institution may only initiate the sale of bonds that are to replace the maturing bonds upon refinancing if the mortgage credit institution has a justified expectation that the sale can be carried out without the interest rate becoming 5 percentage points higher than the most recently set interest rate. This does not apply if the mortgage credit institution carries out a sale of a small amount of bonds with a view to clarifying whether the interest rate becomes 5 percentage points higher than the most recently set interest rate. If a sale cannot be initiated, cf. first sentence, and the maturing bonds mature, the term of these bonds is extended by 12 months. Upon the maturity of the bonds after the 12-month extension, new bonds must be issued to replace them. In this issuance, the first and second sentences do not apply.

Subsection 5. If the term of a mortgage loan is longer than the term of the underlying mortgage bonds, covered mortgage bonds, or covered bonds, it applies for the bonds that are to be replaced by new bonds at maturity to refinance the loan that if there are no buyers for all the necessary new bonds, the term of the relevant bonds is extended by 12 months at a time until refinancing can be carried out where there are buyers for all the necessary new bonds. Upon the maturity of the relevant bonds after the 12-month extension, new bonds must be issued to replace them. In this issuance, subsections 1, 2, and 4 do not apply.

Subsection 6. Notwithstanding subsection 5, in the case of missing refinancing of loans where the underlying bonds have a term of over 12 months at the refinancing of the loan, an attempt may be made to refinance the loan with bonds with a shorter term prior to the extension according to subsection 5.

Subsection 7. The interest rate on bonds that are fixed-rate and have a term of up to and including 12 months at the refinancing of the loan and have been extended according to subsection 1 or 5 is set to the effective interest rate determined in connection with the most recent refinancing plus 5 percentage points. The interest rate is set the first time the term of the bonds is extended. For further extensions of the term in accordance with subsection 5, the interest rate set in accordance with the first sentence continues to apply.

Subsection 8. The interest rate on bonds that are fixed-rate and have a term in the interval from 12 to and including 24 months at the refinancing of the loan and have been extended according to subsection 2 or 5 is set to the effective interest rate on a corresponding bond with the same remaining term 11-14 months earlier plus 5 percentage points. The interest rate on bonds that are fixed-rate and have a term of over 24 months at the refinancing of the loan and have been extended according to subsection 5 is set to the effective interest rate on a bond with 11-14 months remaining term set 11-14 months earlier plus 5 percentage points. The interest rate is set the first time the term of the bonds is extended. For further extensions of the term in accordance with subsection 5, the interest rate set in accordance with the first or second sentence continues to apply.

Subsection 9. The interest rate on bonds that are variable-rate and extended according to subsection 4 or 5 is set to the most recently set interest rate plus 5 percentage points. The set interest rate according to the first sentence must remain unchanged for the 12 months the extension runs. The interest rate is set the first time the term of the bonds is extended. For further extensions of the term in accordance with subsection 5, the interest rate set in accordance with the first sentence continues to apply.

Subsection 10. If the term of a mortgage loan is longer than the term of the underlying mortgage bonds, covered mortgage bonds, or covered bonds and the underlying bonds are variable or fixed-rate, the interest rate that the borrower must pay in situations where the term of the bonds is extended according to subsections 1, 2, 4, and 5 must be based on the interest rate set according to subsections 7-9.

Subsection 11. Extension in accordance with subsections 1, 2, 4, and 5 does not deprive the mortgage credit institution's borrowers of the right to make full or partial redemption of loans granted on the basis of the issuance of mortgage bonds, covered mortgage bonds, or covered bonds.

Subsection 12. Subsections 1-5 do not apply to mortgage loans granted against mortgage on real estate located outside Denmark.

Subsection 13. The Minister for Industry sets more detailed rules on the extension of bonds covered by subsections 1-4 and Section 32 and on the organization of bond sales and dispensation in connection therewith.

Section 7. Loans may, regardless of Section 5, be granted beyond the loan limit for the redemption of both mortgage loans in the own institution and preceding loans. Loans according to the first sentence are disbursed with a cash proceeds maximum corresponding to the redemption amount and the costs in connection with redemption and granting of the loan.

Subsection 2. Loans may, regardless of Section 5, be granted beyond the loan limit when the loan:

1. is covered by Sections 33a or 33b and is used for the redemption of a mortgage loan granted by another mortgage credit institution or for the redemption of a loan that is included in a register in a credit institution with permission to issue covered bonds, or
2. is covered by the rules in Sections 16b-16g of the Financial Business Act and is used for the redemption of a mortgage loan granted by a mortgage credit institution or for the redemption of a loan that is included in a register in a credit institution with permission to issue covered bonds, and where the loan is transferred to the receiving mortgage credit institution no later than 6 months after disbursement.

Subsection 3. Loans covered by subsection 2 are disbursed with a cash proceeds maximum corresponding to the redemption amount and the costs in connection with redemption and granting of the loan.

Subsection 4. Loans according to subsections 1 and 2 may only be granted if the security does not thereby be significantly impaired.

Subsection 5. Subsection 1 applies correspondingly upon redemption of a mortgage loan in another institution if the valuation used for the determination of the original loan was based on approved acquisition costs under the Act on General Housing and supported private cooperative housing etc., the Act on Housing Construction, or the Act on Housing for the Elderly and Persons with Disabilities.

Subsection 6. For loans granted for the redemption of loans in certain non-profit housing sections, cf. the Act on the Re-prioritization of Certain Non-Profit Housing Sections etc., unpaid, due installment payments with accrued interest thereon may not be included in the basis for loan determination.

Disbursement against Guarantee etc.

Section 8. When the conditions for disbursing the loan are otherwise fulfilled, a loan may be granted even if the deed of mortgage is burdened with prejudicial legal remarks, provided that security is provided for these to be deleted.

Subsection 2. When the conditions for disbursing the loan are otherwise fulfilled, a loan may be granted without a registered deed of mortgage, provided that security is provided for the emergence of a registered deed of mortgage.

Subsection 3. When the conditions for disbursing the loan are otherwise fulfilled, a loan may be granted even if the borrower has not registered title to the property, provided that security is provided for the borrower to obtain final title to the property.

Subsection 4. When the conditions for disbursing the loan are otherwise fulfilled, a loan may be granted without the document mentioned in Section 11, subsection 3, provided that security is provided for the emergence of this document.

Subsection 5. For construction and extension etc., a loan may be granted on the basis of the property's expected value (advance loan), provided that security is provided for the loan to be redeemed or reduced if the loan could not be granted with the approved amount after the expiry of the deadline for the completion of the construction.

Subsection 6. To the extent that a loan is issued on the basis of covered mortgage bonds and covered bonds, disbursement of the loan may take place before final registration, cf. subsections 1-5, if security is provided for this in accordance with Article 129(1), points (a)-(c), and subsection 1a, of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms. If the security is provided in the form of a guarantee from a credit institution, the guarantee will be covered by the 15-percent limit or 10-percent limit resulting from Article 129(1), point (c), and subsection 1a, of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms, unless the guarantee is provided in connection with loans where the deed of mortgage has been notified for registration and the necessary security has been provided for the final registration of the deed of mortgage and the institution obtains the finally registered deed of mortgage without undue delay. The guarantee is, however, included in the 15-percent limit or 10-percent limit, cf. Article 129(1), point (c), and subsection 1a, of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms, if it is provided in accordance with subsections 3, 4, or 5.

Subsection 7. The Danish Financial Supervisory Authority may set rules on the granting of loans etc. according to subsections 1-6.

Subsection 8. The Danish Financial Supervisory Authority may dispense from the requirement in subsection 6, third sentence, that guarantees provided in accordance with subsection 3 must be included in the 15-percent limit or 10-percent limit, cf. Article 129(1), point (c), and subsection 1a, of Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms.

Section 9. In the security base for a mortgage credit institution's liabilities, deeds of mortgage for loans in general housing construction and free-care homes financed with mortgage loans with state disbursement support, which are re-prioritized in accordance with the Act on the Re-prioritization of Certain Non-Profit Housing Sections etc., as well as deeds of mortgage for non-convertible loans taken over by the Danish Agency for Modernisation in accordance with the Act on Counteracting Lock-in Effects on Non-Convertible Mortgage Loans etc., may be replaced with a corresponding claim on the State Treasury. The claim may be redeemed in extraordinary manner by the State Treasury handing over to the mortgage credit institution the mortgage bonds corresponding to the relevant loans.

Subsection 2. Holders of rights over bonds, the security base of which is covered and changed by subsection 1, may not demand the bonds be redeemed or otherwise make claims against the mortgage credit institution.

Valuation of Properties and Determination of Mortgage Loans

Section 10. The mortgage credit institution must estimate a cash value of the property for use in loan determination.

Subsection 2. The value must lie within the estimated amount at which the property can be traded on the valuation date in an independent transaction between an interested buyer and an interested seller under normal market conditions, where each party has acted on an informed basis, with caution, and without coercion (market value). Circumstances that require a particularly high price must not be included in the valuation.

Subsection 3. The mortgage credit institution must, in the valuation, take into account any risk of changes in market or structural conditions.

Section 11. Loans may be granted on the basis of real estate owned by the borrower. All title holders must be listed as debtors on the deed of mortgage, cf. however subsections 2 and 3.

Subsection 2. The provision in subsection 1, second sentence, may be deviated from if the loan is granted in accordance with special legislation within the agricultural sector.

Subsection 3. Loans may be granted on the basis of an ideal share of a real estate, provided that a registered document exists linking a registered exclusive right of use to the share. All title holders to the ideal share must be listed as debtor on the deed of mortgage.

Subsection 4. In addition to land and buildings, building fittings, cf. Section 38 of the Registration Act, and the fittings mentioned in Section 37(1) and Section 37a(1) of the Registration Act, which are covered by a registered mortgage on the real estate, may be included in the valuation of the property.

Subsection 5. In the valuation of the property, regardless of subsection 4, the fittings belonging to the property that are not covered by a registered mortgage on the real estate, cf. Sections 37 and 38 of the Registration Act, may be included, provided this is solely due to the fittings being owned by someone other than the owner of the real estate, and provided that a pledge in these fittings is obtained for security for the loan in the real estate in accordance with the Registration Act.