Asset eligibility criteria
Mortgage loans and securities serving as collateral must meet restrictive eligibility criteria including loan-to-value limits and valuation of property requirements laid down in the legislation.

Eligibility criteria for mortgage loans are:

  • Only mortgages on real property are eligible as collateral
  • Loan-to-value ratios may not exceed the limits indicated in the below table 1

    Table 1: Loan-To-Value ratios
    Property type
    Maximum LTV
    Private Residential Property
    80%
    Residential Rental Property
    80%
    Leisure Homes
    60%
    Office and Shop Property
    60%
    Industrial Property
    60%
    Agricultural Property
    70%
    Loans w/Municipal Guarantee
    80% - 100%
  • Terms may not exceed 35 years for mortgage loans guaranteed by municipalities and 30 years for all other mortgage loans
  • Private residential and leisure home mortgages may not be repaid slower than a 30 year annuity with an option for interest only periods of maximum 10 years
  • Market value of underlying property must be assessed by the mortgage bank individually on sight

Realkredit Danmark calculates loan-to-value ratios on a current basis in order to monitor the risk of the loan portfolio. The market value of a property is estimated on the basis of Realkredit Danmark's latest valuation of the property adjusted for property price inflation since the calculation was made. The value of the loan portfolio is marked to market. Realkredit Danmark’s portfolio is highly secured with approximately 90 per cent of the outstanding coved by mortgages within 60 per cent of the estimated value of the underlying property.

Eligible securities are:
  • Government bonds and deposits with central banks issued by OECD member states
  • Mortgage bonds issued by mortgage banks in OECD member states
  • Deposits in commercial banks with a maximum term of 12 months

Securities may only serve as collateral temporarily. Proceeds from issuing mortgage bonds must be invested in mortgage loans within 90 days from the issue. Similarly, proceeds from borrower’s payments exceeding payments to mortgage bond investors must be invested in mortgage loans or used to redeem mortgage bonds in circulation within 12 months. Hence, mortgage bonds are collateralised by mortgages on real property primarily.

Contact us

If you have any questions, feel free to contact us:

Bond Investor Contact:
Jens Kristian Kimper
+45 4513 2039
jekk@rd.dk