Homeowners have more spending money

Record-low interest rates, lower income taxes and higher salaries mean that homeowners spend less of their earnings on mortgage payments than during the 2008-2009 financial crisis.

An analysis carried out by Betri Bank, based on average house prices and average salaries, shows that despite a significant spike in house prices over the past decade, a lower proportion of people’s salaries is now spent on mortgages.

Homeowners in Tórshavn currently spend, on average, 8 percent less of their salary on mortgage payments, while elsewhere in the country this figure varies from 3 to 8 percent.

 >> SEE ALSO Huge difference in house prices

In addition to the low interest rates, low taxes and higher salaries, another reason for this change is that most municipalities have increased their child allowance rates.

In 2007, the mortgage interest rate was 7.25 percent, and the average annual salary was DKK 267,000.

The current mortgage interest rate is 2.95 percent, and the average annual salary is DKK 361,000.

Translated by prosa.fo