--- title: "Glossary: Danish mortgage terms explained" description: "Short explanations of Danish mortgage terms – from repayment and contribution fee to price deduction, home equity and APR." url: https://realkredit.ai/ordbog?lang=en language: en-GB last_verified: 2026-10-08 publisher: realkredit.ai (Benjamin Jochum) --- # Glossary: Danish mortgage terms explained > Idea and choice of topics: Benjamin Jochum Text: written by AI (Claude from Anthropic) based on verified rates and official sources. Not yet manually reviewed - **Adjustable-rate loan (F1, F3, F5):** A loan where the rate is fixed for a period and then reset to the market rate. The number is the number of years between resets. - **Annuity loan:** The most common loan type, where interest and repayment together are the same amount each period. At first most goes to interest, later most goes to repayment. - **APR (ÅOP):** Annual percentage rate of charge – a combined measure of the loan's cost that must be stated in the loan offer. For variable loans it assumes the rate does not change. - **Balance principle:** The principle that each mortgage loan is matched by bonds with the same payments. It makes it possible to repay the loan by buying back the bonds. - **Bond loan:** The ordinary mortgage loan, where your debt equals the bonds sold to fund the loan. - **Break-even:** The point at which refinancing has earned back its costs, so you are better off than without refinancing. - **Capital gain and loss:** The difference between the debt and what it costs to repay it. For individuals, a gain on a bond loan is tax-free, and a loss is not deductible. - **Cash loan (kontantlån):** A loan where the debt is based on the amount paid out, and the rate equals the effective rate. A capital gain on early repayment can be taxable. - **Contribution fee (bidragssats):** The institution's ongoing payment for administering the loan and carrying the risk. Calculated as a percentage of the outstanding debt per year and tax-deductible. - **Debt-to-income ratio:** Your total debt divided by the household's income before tax. Above 4, the 60/4 rule on loan types applies. - **Deed:** The document that transfers ownership of a home. Registration costs DKK 1,850 + 0.6% of the purchase price. - **Disposable amount:** What you have left each month after tax, housing, loans and fixed expenses. - **Down payment:** The part of the purchase price you pay from your own savings. Normally at least 5%. - **Effective rate:** The total annual cost of the loan as a percentage, including interest, contribution fee and costs. On realkredit.ai we calculate it ourselves in the same way for all loans. - **Fixed-price agreement:** An agreement that locks the price of your new loan before it is paid out. It removes the risk of the price falling in the meantime, but typically costs a fee or a price premium. - **Growth-area guideline:** The Danish FSA's extra requirements for home loans in Greater Copenhagen and Aarhus, including that net wealth must withstand a price fall when the debt-to-income ratio exceeds 4. - **Home equity:** The home's value minus the debt secured on the home. - **Interest tax relief:** The tax value of your interest expenses (including contribution fees). In 2026 about 33% up to DKK 50,000 per year (DKK 100,000 for married couples) and about 25% above. - **Interest-only period:** A period, typically up to 10 years, when you only pay interest and the contribution fee. The debt does not fall, and the fee may be higher. - **Land registration duty:** The state's duty for registering a mortgage or a deed. For a mortgage: DKK 1,825 + 1.25% of the principal (from 1 January 2026). - **Loan processing fee:** A fixed fee to the institution for setting up the loan. The bank may charge its own fees on top. - **Loan-to-value (LTV):** Your debt secured on the home as a percentage of its value. A DKK 2.4 million loan on a DKK 3 million home gives a loan-to-value of 80%. - **Market value:** The outstanding debt multiplied by today's price. It is what it costs to buy back the debt. - **Mortgage bond:** A security issued by the mortgage institution to fund the loans. Investors receive your interest and repayments. - **Mortgage deed:** The document that gives the lender security in your home. It is registered, and registration duty is paid. - **Outstanding debt:** What you owe on the loan right now (at a price of 100). - **Payment:** The total amount you pay per period: interest, contribution fee and repayment. - **Price (kurs):** The price of the bonds that fund the loan, per DKK 100. A price of 98 means you receive DKK 98 for every DKK 100 you owe. - **Price deduction:** A cost in price points deducted from the price when the loan is paid out or refinanced. - **Principal:** The face value of the loan – what you owe when the loan is paid out. With a price below 100, the principal is larger than the amount you receive. - **Proceeds:** The amount you receive from the loan after price deduction, commission and other costs. - **Refinancing (conversion):** Repaying a loan and taking out a new one – at a lower rate (down), a higher rate with lower debt (up) or a different loan type. - **Refinancing (of adjustable-rate loans):** When an adjustable-rate loan gets a new rate, new bonds are sold. This typically happens at auctions, and each time you pay a price deduction. - **Repayment (afdrag):** The part of your payment that reduces your debt. The rest of the payment is interest and the contribution fee. - **Repayment (redemption):** Paying off the loan in full before it ends – either at a price of 100 or by buying back the bonds at the current price. - **Settlement commission:** A fee calculated as a percentage of the market value when bonds are bought or sold in connection with your loan. - **Term:** How long the loan runs before it is paid off. At most 30 years for residential mortgage loans. - **Top-up loan:** An extra mortgage loan on top of an existing loan. It sits last in priority, where the contribution fee is highest. --- > realkredit.ai provides general information and calculations – not personal, legal or financial advice, and nothing here is legally binding. The figures are indicative and based on your own numbers and the prices we have verified. Always check your loan offer, and talk to your bank, an independent adviser or a lawyer before you decide. HTML version: https://realkredit.ai/ordbog?lang=en · Rates checked 8 October 2026 · Error? digitaleannoncer@gmail.com