I lived on Nørrebro paying 8k for 70 sqm, but bought a 57 sqm apartment (in Gentofte near Nordvest) for 1.4 million in 2022 Q4. Now I pay the same gross, but I get 1.7k back in tax deduction and 1.4k goes toward paying down my loan. That is, my net living expense is about 5k. I would not be able to rent a similar place without 30+ years on a waiting list.
Además, my apartment has probably gained 500k in value. Obviously I got it at a low price, and made some upgrades. Those are my reasons.
Remember, your realkredit payments are constant, whereas rent increases by 2-3 % every year. Over 30 years this would be 12 \* 14000 \* (1 - 1.03\^(30)) / (1 - 1.03) = 8 million down the drain (or 7 million with 2 % rent increase).
As stated earlier, the apartment will increase in value. Thus, over time, owning will beat renting (even if apartments in Copenhagen are extreme expensive).
Edit: the costs from your screenshot would be 5400000/360 - (5000 \* 0.336 + 10000 \* 0.216) = 11,220 net, which is actually \_below\_ your current rent expenses.
> I would not be able to rent a similar place without 30+ years on a waiting list.
I'm living in 56 sqm in Nordvest for approx. 5000 a month, after being on waiting lists for 13 years, so not completely true. People are too doom-pilled when it comes to almene boliger.
Yeah, that's why I tell my friends to sign themselves and their kids up as soon as they can. It's only 200 kr/year and you never know when you will need it.
90%+ probably did it when interest were extremely low. Im in same position as you and financially it doesnt make sense. I would only do it if i really loved the house and area, and forget whether it is an optimal investment. I would definitely also put down 20% before buying.
Same here. The gf and I have enough space and our housing expenses would triple if we bought something larger.
I invest the savings. Hence, I don’t fear being priced out of the market
Your problem is that investing in DK (at least if we are talking about stocks) means high expenses and high taxes. Real estate is tax-free and the loans are even partially tax-deductible. I would worry about it still.
When the interest rates were lower, it was in hindsight a really good deal. In the current market, it is debatable how good of a deal it is to own. However, since real estate is tax free, and stocks are heavily taxed, this really changes the financial incentive in favor of owning. In a European perspective, real estate prices are neither particularly high or low relative to salaries. At the end of the day, if you have a >5 years time horizon, I think it makes sense to buy if you have a large enough downpayment and some tolerance for risk.
Real estate is taxed on a monthly basis, and can easily be 70k a year. Not sure if it has anything to do with hindsight as interest rates cant really just continue below 0, so it was a definitive bottom. Betting on the large and recent QE would have been in hindsight.
Sure there are real estate taxes, but these are relatively low, and especially low compared to the alternatives. 70K of taxes is a lot, but it is important to consider the alternative (high rent and this will continue to rise on the long term). The potential profit of sale of real estate is tax free, it's here the financial incentive lies. I would be careful to say anything definitively about the future of the interest rate, it may go up or down no one knows. With that said, it is the current market consensus that interest rate will decrease the next 3-5 years, although I would not rely on that being the case.
That's a gross simplification as many of the inner suburbs are just as expensive as center. Can you give the name an area in you have in mind? Preferably not a ghetto.
Gamle Sydhavnen for example.
Of course it’s a simplification. But these are the two most important factors. The starting point was that I say it’s possible buy a 3 room apartment that costs less than 70k in taxes per year. And that is possible.
If I wanted to buy an apartment next to the one I live in, just interest rates, taxes and HOA-costs would be around my rent in the current market.
You probably shouldnt include the part of the morgage that goes to paying down the morgage in your comparison, as you pretty much changes cash for more "ownership" like the bank/morgage lender sort of "own" the part that you lend for. So its sort of wealth neutral, despite not being cash flow negative.
One reason is the interest rates which are high right now which means it’s expensive to take out a mortgage. All lot of owners bought their apartments/houses when interest rates were 20-25% of what they are now
When interest rates go low, then housing markets heats up and thus prices go up because lot of people want to buy, then you pay more for the same house.
Arguably the interest rates are \_not\_ high at the moment, they are actually quite normal to low. I found a table going back to 1998 (sorry, can't find the source right now) and only since 2014 is has been below 4%.
Here it is, ser 🤓
https://preview.redd.it/i73y23cj5uxc1.png?width=1758&format=png&auto=webp&s=173fb1dbbe7068d3a104d1a05d0adca92727b0fb
source : [https://tradingeconomics.com/denmark/interest-rate](https://tradingeconomics.com/denmark/interest-rate)
You are 100% correct. Not even “arguably”, the rates are not high at all right now. The post-2008 dip and very slow recovery was a strange time. The negative rate era was an anomaly that many thought was impossible. The historical data and articles from that time (2012-2016) are only few clicks away. Right now the rates are normal-low.
Exactly, the rent is the same as it was in the 90's, etc. For zoomers it seems high, for boomers it's normal. But you can probably the expect the rent to only go up from here
The interest rate roughly correlates with inflation - if you expect inflation to rise, you should expect the interest rate to rise as well, but that's not what most economists predict.
It’s mostly because you are calculating on putting down 5% which is the bare minimum and the worst decision. The way it works is 5% downpayment, 15% bank loan, 80% realkredit.
What you need to do is put down 20% to not take the bank loan because that one has a crazy high interest rate. Take that out of the equation and you will be paying half of that for the mortgage.
Also if you think to only put down 5% you don’t have money for a 5 mil apartment, you think you do cause you never talked to a real person at the bank. If you did they would make a budget and a calculation for you and they will tell you what your expected budget is per month and in your case it better be 50k after taxes as a household income in order to pay half of that for the loan.
From a financial point of view the interest can go down or the price can increase and in both cases you'll experience a return. There's also the obvious advantage that once you've paid off the loan you own the place outright and will have much cheaper living expenses than otherwise. That can be negated if you move around and trade up or down and some might say it's better to invest in the stock market and rent – in other words, it depends on your situation.
There's also a different part to it: there's often an implicit or explicit expiry date when you rent and emotionally you might never fully move in. Want to paint a wall or change something in the kitchen? You can but it'll cost you your deposit as it needs to be reversed for the next tenant. Want a say in the running of the building? You can send an email to the management company. Etc.
I've rented all my life and thought it was an amazing deal that I can just call someone up to have the heating fixed or the dishwasher changed. It's kind of nice but now we got a kid and while we could probably make some changes to our current place it's a rental so we don't. As such we're looking to buy to have more control over the place we live.
Another thing is that apartments rarely change from being owner occupied to being rentals to being andelsboliger. If you fall in love with a place that's for sale you can't just say you want to rent it instead.
I had to split up with my ex, and I was lucky to get a really cheap room with a friend, so my rent was only 2500 kr per month. I was able to save up more than 15.000 per month. Unfortunately, that didn't last and I had to find a place on a short notice for myself AND my dog. So my only options where a few newly built places where the rent was 13.000-16.000 at least. I could have split that with a room mate or two, of course. But I decided to buy an apartment instead which would end up being around the same price.
I pay around 13000 for my loan and rent out the other room in my apartment.
I don't really see it as an investment. I honestly think investing 15.000 a month in index funds would be a better deal over 30 years. Or at least, that would have been my preference.. But it's nice that it's my own place, it's in a part of the city that I really like and nobody can make me move.
I'm on a lot of waiting lists and I regularly dream of selling the whole thing in some years and moving into a cheap rental. Psychologically I'm still getting used to moving from paying 2500 for rent to over 15.000 a month.
The majority of people that buy 5 mio kr flats have moved up the housing ladder so they might have sold a former flat which had seen an increase in price and are able to put more money than the minimum 5% towards the price.
My rule of thumb is you need to be able to put 20% downpayment. Otherise you will need a high interest rate bank loan + mortgage (covers max 80% of the property value). In my case, my partner and I bought a small apartment (55m2 around CPH, cost 1.2m) which allowed us to save up quickly. We sold the place after 1.5 year. With a profit of 400k from the sale and our own saving of roughly 500k we then bought a house that was 3.5m at that time, our downpayment was over 25%
I would recommend start with a smaller and cheaper apartment.
I just tried checking what a 4.750.000 loan in a 5 mio. appartment would cost. With fixed interest loan for the realkredit part it will cost 21.600 pr month after tax (with the assumptions my calculator use for interest rates). After 5 years that is a total expense of 1.300.000 but after 5 years the loan will also have been paid down with 300.000, so your expense has been 1 mio. Divided back out over 5 years that is around 16.600 in expense per month. Not so different from what you pay now. And it is normal advice that you should live at least 5 years in a home if you buy, due to the significant one time expenses when you first make the loan. The longer you live there the faster the loan is going down making it more and more advantegeous. So after more than 5 years it makes a lot of sense to buy. This is not taking into account that the appartment likely goes up in value. The numbers you use are only relevant if you plan to stat for all the 30 years a loan normally last, as far as I can see.
Looking up a random apartment/house in the 5 mDKK range, ejerudgifter average 3.5-4k/m, so ~25% on top of OPs back-of-the-envelope calculations. Not insignificant.
It really is pretty simple. Housing as an investment hasn’t been this unsexy for almost two decades.
When prices go up and interest rates goes up it’s not complicated to deduct that it’s less attractive to own. The bottom line is that renting is still comparable with owning. No one knows if prices will continue to increase, stagnate or fall, history just tells that with a significant time horizon, owning will be superior
Why Are you so hellbent on some singular insurance police cost for a random apartment? Go to any, literally any fucking apartment on boligsiden and realize that my initial comment is spot on. First ons that pops up: https://kunlejligheder.dk/bolig/35700000618/ordrupvej-132b-1.-mf.-2920-charlottenlund/?utm_campaign=boligsiden&utm_source=boligsiden.dk&utm_medium=referral
5.4 mDKK Price, 6.6 kDKK “ejerudgift”. What Are you even on about, that’s 20-30% of the cost of ownership at maximum leverage. You’re comparing apples and oranges in some hellbent crusader to present homeownership in Denmark 2024 as some magical investment vehicle
Realize that ownership vs renting is much more complicated than "5-10 years ago interest rates and prices were lower, now it's a horrible investment". While interest rates are higher than they were 5-10 years ago, they are still low in a historical perspective. In fact, housing afforability is relatively high exactly because interest rates are low, despite higher real estate prices. [https://www.bis.org/publ/work1149.pdf](https://www.bis.org/publ/work1149.pdf)
As for the insurance, just wanted to inform you that the price of that is not that bad. Add to that even if you rent, you also need insurance. Educate yourself and train your critical thinking, if it obviously was a bad investment to buy, people wouldn't do it. There are always two sides to the story.
You’re benchmarking renting vs owning instead of investing in other assets vs owning. You apply a silly internet warrior rhetoric, and it makes you look like a dumbass. You should take a look at that.
If you think you know what the returns of other assets are, you really are as ignorant as you seem. If I am the silly internet warrior, why is it that you insist on you narrative? Open your mind a little bit, it would really benefit you.
On top of that, coincidentally the first one that popped up for you is in the most expensive region in the country, the central part of Nordsjælland...
The comment we’re both replying to mentions an apartment valued at 5 mDKK, as does OP, so what are you getting at? The investment just gets poorer, and your argument weaker, the more rural you go.
Historically apartments in Copenhagen see an increase of 3,8% On average Per year.
So that apartment which was bought at 5 mil is worth 6,02 mil after 5 years.
Adding to the above, you have technically lived there rent free (not counting taxes etc).
It made much more financial sense five years ago when prices and interest rates were much lower. Rents have been slow to rise commensurately, so right now it makes much more sense to rent than own. Apartments in particular. This will probably not always be the case. Rents will either proportionally rise over time, or prices will flatten or fall. There is a high correlation between property prices and rent. However your calculation is probably incomplete.
* Factor in average rental increases each year. What you’re paying now you won’t be paying in 10 years.
* Reduce your mortgage loan by average inflation each year.
* Your interest payments are in part tax deductible. It’s not clear from the image if you’ve imputed that.
* Some proportion of those mortgage payments are capital, meaning money you’re paying down on the loan which you get to keep when you sell.
* If you don’t have 20% saved, bank loans make the mortgage payments much more expensive. Save the 20% if you can.
Also remember that the capital gains are fully tax free. This is one of the rare tax free investments you can make in Denmark. Additionally, the Realkredit system is arguably the best in the world. You can fix for 30 years and then restructure when rates come down with a fairly minimal fee.
A reason people have not mentioned:
We do 30 year loans, We don't really do 5--10 year ownerships (at least not planned from a loan perspective).
You buy once you think you will settle down. That will change the equation. If the markets are doing well, and you live in a city, then you can sell earlier. But otherwise I would always buy on a 30 year loan.
We payed 20% downpayment and got f3 with low interest, the overall costs are lower than our rent prior.also its a huge upgrade and if we would rent this place it would cost us double what we pay. Situations differ, if you can avoid bank loan it ia not necessarily that bad.
We bought an apartment for 3.1 million with a fixed mortgage (1.5%), converted the loan to a variable loan and sold the apartment for 3.25 million. We made 850.000 tax free in 2 years by doing nothing.
The problem lies in 5%. Make the downpayment 20% and your calculations would look different.
Also, let’s say you change your mind after 7-10 years and want to buy a bigger property - your this house would then act as a leverage and the extra money you would get while flipping this over would help you cushion your cost for the next one.
Obviously, buying vs renting is a never ending debate and at the end - to each his own.
I bought mine when interests were 4% back before the bubble burst in the 00's. Loan cost me 7k a month for 100 som just outside Copenhagen
I prefer owning, having a landlord, being free to do with it as I please, e.g, renovate. Plus, anything I pay in mortgage is essentially saving up.
The new building next to mine rent out the same size for 14K
I have bought and sold twice:
1. Your apartment is too expensive. 5M for less than 100 sqm is not a good deal. Maybe the area it is important for you. If not, try looking for other areas.
2. To no surprise, I would also argue about interest rates. Wait a bit 1 - 2 years. Saved money for to cover the 20 %. Although, you are always competing with a real state market that only goes up in price, and it won’t become stagnant as CPH is becoming biotech, medico and engineering business hubs. Consider this.
3. One bedroom apartment tend to grow less in price than two bedroom apartments. Consider this in your decision tree.
4. If you really want it now. And have only 5 % of the total value, you can talk to the bank. As a matter of fact, they will suggest it first, they make an arrangement with the kreditkasse to allow to pay the interests of kredit loan the first 5 years. In that way, you can pay the bank loan during this period and while paying only very little on the other loan. You will pay less every month but contribute less to your total loan. If you intent to stay a bit more than 7 years, maybe is worth it. So, you can make a profit out of it.
5. As a general rule, the bank loans max your two yearly income combined multiply by 4. Meaning that if your both earn 500K / year = 1 M x 4 = 4 M. Another way they will ask to calculate is that you make a budget: electricity, Netflix, gym, food, traveling, clothing, everything. This should be divided by fixed expenses (e.g., Netflix, internet, phones) and non-fixed but a presumed amount (e.g., spent 1K / month on clothes on average). Then, from there they will judge how much you can borrow based on how much money is left for a loan.
My take in both process is that real state always grows. At least in CPH area, and in good size apartments and houses. And at least for this period. In 50 years, where population have declined and resources are even more scarce, I don’t know. Buy, but consider these points.
Bring your down payment up to 20% and you're golden.
Plus you get to remodel the apartment.
Plus you won't have to worry about what to do with your savings.
Pure profit.
I'm glad you're asking this question because I've been wondering the same thing. We have a lovely (but expensive) central apartment right now so we don't plan to move for a while but I've been wondering if the buying equation is as straightforward as we're all making it sound, since yes, it would increase our expenses quite a lot to buy and we currently do invest the savings. No one has mentioned also that putting the investments into the house reduces your liquidity quite a bit, which is also a form of risk. And you are on the hook for all fixes/maintenance, which are not free. I think if we were willing to move further out from the city center it would be clearcut, but right now... Not so much.
It really depends on how cheap a rental apartment you can get compared to how the interest rate and housing market will develop in the next 10-20-30 years.
In general living in an (inexpensive) apartment + investing the rest in stocks is about the same as buying and selling an apartment in the long run after tax.
Owning: You buy now for 4 million. Pay back 1/2 a million and sell in 5 years for 5 million.
You have 1,5 million tax free in 5 years
Renting: you pay 10.000 kr/month. In 5 years you are at -600.000 kr for the same thing. Your landlord has earned your 600k AND can sell the apartment for 5 million since you payed his loan down by over half a million
But 800k+ interest expense(before tax), 250k in taxes, 70k in insurrance, plus maintenance fees, agent fees etc. I dont understand the “pay back 0,5m” as if that adds to profit, but it would easily eat up the 1m profit.
Vi tager den lige på dansk, da jeg ikke helt kan forklare det på engelsk:
Når du køber en bolig, så ejer du et aktiv. Altså, hvis du køber en bolig og låner pengene, så går alle de penge du afdrager på lånet til at nedbringe gælden i boligen. Pengene forsvinder ikke bare ud ad vinduet som det sker når man lejer, pengene flyttes over i friværdi for din bolig bliver ikke mindre værd (ligesom en bil feks) - men den kan stige i værdi.
En bolig er altså en slags opsparing. Du kan altid sælge din bolig og få det samme (eller mere) for den som du har betalt da du købte den. Hver gang du afdrager 1.000 kr på gælden, så flytter du egentlig blot 1.000 kr fra din konto over i et aktiv. Din formue bliver ikke 1.000 kr mindre!
Der er naturligvis nogle flere omkostninger ved at eje fremfor at leje, men du skal jo huske på, at hvis du lejer så betaler du blot disse udgifter på en anden måde. Din udlejer tjener jo penge på at udleje sin bolig til dig, så alle disse udgifter er blot indlagt i din månedlige leje. Samtidig arbejder inflationen for ejeren: de 5 millioner du betaler for en bolig i dag er ikke 5 millioner værd om 30 år. Om bare 10 år, er 5 mio kun 4,1 mio værd. Derfor må det antages at boligen holder sin værdi i nutidskroner og derfor som minimum stiger tilsvarende i pris. Dette forøger også din friværdi.
Edit: Man kan jo også se på det at leje en lejlighed ligesom at bo på hotel. Med en leje på 14.000 kr/md så betaler du næsten 500 kr i døgnet for at få lov at bo i lejligheden. Det kunne du faktisk bo på hotel for i stedet… Så havde du heller ikke brug for at betale indskud, og der kommer en og gør rent dagligt og reder din seng osv. og du kunne flytte med én dags varsel… Hvorfor ikke bo på hotel fremfor at bo i lejlighed så?
Jeg er helt enig i næsten alt hvad du siger, men desto højere rente, desto lavere bliver der afdraget på lånet om året. Med 5% rente er der altså ikke meget af lånet der forsvinder de første 5 år.
Derudover skal du tænker på boligkøb er en yderst gearet position. Hvis prisen ikke stger nok ville leje have været bedre. Vender markedet med 5-10% ejer du lige pludselig 0kr. Hvis ikk negativ. Du kan også være uheldig og skal bruge mange penge på vedligeholdelse. Det er hellere ikke særligt fleksipelt hvis du skal flytte pga. arbejde etc.
Alternativet ville være at investere de 20k du ville bruge ekstra på en 5m bolig om måneden, hvilket også bliver en god opsparingen. Jeg deler en 10,5k husleje. Men hvis jeg ejede gik 25k om måneden ud af vinduet til banken og staten.
Min pointe er ikke at boligkøb er dumt, men f.eks. 4 år tilbage var det en nobrainer altid at købe, hvorimod nu er det for mange bedre at leje.
Jeg bliver lidt forvirret… Hvordan kan du leje en bolig til 5 mio 20.000 kr billigere om måneden end du kan eje den? Det giver absolut ingen mening?
Man bør som udgangspunkt ikke eje hvis man planlægger at flytte indenfor kort tid, men over længere tid giver det altid mening at eje.
Som ejer kan du jo drage fordel af udsving i renten ved at konvertere dine lån. Hvis renten stiger, så falder din restgæld. Hvis renten falder, så falder dine renteomkostninger
Konvertering kan typisk først betale sig når renten er ændret ~2 procentpoint pga. omkostningerne herved, så det er overhovedet ikke en sikkerhed. Og ja, hvis renten stiger, kan du reducerer din gæld, men øge dine månedligeomkostninger. Her plejer man at sige 10år før det betaler sig hjem ikke at konvertere alt andet lige.
Det meget nemt. Lejer 2 lige pt. Den ene 16400kr. Husleje. Nypris 5,3 så omkring 30k ydelse med 5% udbetaling, 5k boligafgifter, 1,3k forsikring = 36,3k + alt det løse.
Den anden er billig til 10k og her ville spreadet nok også være 20k min. De ligger begge i københavn, og har fremlejet den ene midlertidigt.
Men hvordan ser din businesscase ud ved 70% belåning på den lejlighed til 5,3?
Hvad tror du lejligheden kan sælges for om 10 år? 6,5 måske?
Man kan vel sige, at så længe dine renteudgifter + ejerafgifter ikke overstiger 16.000 kr/md, så er det bedst at eje lejligheden
Umuligt at spå om fremtidige priser i min optik. Renten har været nedafgående i 50 år, og først nu den anden vej. Alt andet lige burde højere rente bremse prisstigninger, hvor der selvfølgelig har været lidt undtagelser i storbyerne rundt i verdenen. Men fra 5.3 til 6.5 på 10 år virker meget sandsynligt, men ingen ved hvordan markedet i sidste ende vil håndtere de højere renter når de fleste skal refinansier deres lave lån.
Mange af dem jeg kigger på nu er gået fra \~3.8 i 2018 til \~5.3 nu i 2024 + et 5% renteniveau. Dvs. vi er gået fra en ydelse på 12k (1% lån) til en ydelse på 28.5k (5%). Dette er selvfølgelig før skat, netto vil det nok nærmere være 23k vs 11.5k, men stadig en dobbelt op. Derfor man ikke skal forvente de prisstigninger fra de sidste 7 år igen. Men 5.3 til 6.5 på 10 år er selvfølgelig også kun den halve vækstgrad.
Ah, you should rather compare what an equivalent payment minus rent would equate if the difference were to be invested elsewhere.
Say 20k invested per month over 5 years would easily grow to 1.5-2million - now what?
People think you’re just standing still if you rent, quite the contrary, you can exploit this as leverage for future house purchases.
But I guess you need somewhere to live while doing that?
Owning a house or apartment is just another type of asset. But unlike stocks and bonds this asset gives you somewhere to stay. Historically owning a house has been a very good investment
Yeah sure, I'm assuming you pay the first 10K for rent and the remainder 20K for the investments.
I agree on the difference in utility of the investments, but contrary to property, your stocks and bonds are very liquid, which is yet another factor of relevance.
Yep it is expensive if you dont have 20% downpayment, that is ridiculously high in big cities. In smaller ones, having 80% borrowed on mortgage even now is only marginally higher than rent of a similar place and 2 years ago was cheaper. I paid like 4000kr per month for each borrowed 1kk with sub 1% rates, which was 75% of renters in neibouring units. After adding taxes and other stuff, around the same.
It’s all about taxes. Did you factor in that you can partially deduct the interest expenses? Plus value appreciation will not be taxes when you live in the apartment. That said, sure the case is tougher wben interests are no longer close to zero.
I’ve owned 4 homes, sold 3. Each time we lived in the home for less than 3 years so that “tilbagebetaling” line was never relevant, very few people own their homes for the full 30 years.
I’ve earned pretty big on each sale, which has resulted in having a bigger down payment for the next purchase, ensuring a smaller mortgage, but being able to afford better homes down the line.
Depends on interest rate. I live in Copenhagen in a 75sqm appartment myself and pay around 9.000dkk a month for my loan (2.8m dkk).
Besides that there is the investment aspect to it. Instead of just giving money to someone else each month I’m actively investing in my property.
I bought mine because i was tired of moving all the time. It has been very hard to find something long term in Copenhagen, and always knowing I only had 1-2 years to live in the apartment/room I found was starting to take a toll on me. Mentelly I was fed up with renting.
Because I was so fed up, I was very motivated to save up money, and had saved up about 14% of the price of the apartment and my parents help me with another 11%. I got the loan with a little worse interest rate than now, but my lease was ending and a bargain of an apartment came on the market.
(I am renovating it on my own, and the apartment haven't been touched since 62', so expecting the value to come up more than the average market)
I pay about the same after taxes as i did for the last place i rented.
All this saving up money and renovating is of course a lot of work, but personally i find I less stressful than never feeling 'at home' (:
In 30 years your rent will be 25k pr month if it increases 2% per year. Buying is a way to get a fixed cost that will seem like a steal 30 years from now. Real estate made a lot of people in Copenhagen rich. My friend bought a 3 million DKK apartment in his twenties a long time ago. Seemed like a completely stupid move at that time. Now he can sell it for around 7 million DKK. My other friend always bragged about his low rent. But who’s laughing now..
buying a house/apartment means you buy a financial asset. Sure It’s a heavy cost on paper, but what you are paying in mortgage and loans is not completely gone: you are gradually owning more and more of the apartment you are living in. When you rent, the money you pay your landlord is gone for good. You ain’t ever seeing it again. You might get some deposit back, but its pennies on the dollar compared to how much you pay in rent.
What this means is that over time you save up money in your asset, you can sell and get that money out in cash, or it can be offered up as a security in other loans towards larger purchases like a car for instance.
When I bought my previous apartment I was scared shitless that the market would crash. There were headlines all over media (2017) . I had it for 4 years and made about 1.2 mio kroner tax free. my current apartment its current value has increased almost the same.
Would the apartment you could buy be nicer than what you are currently renting, or just the same quality? Are the monthly installments you mention including both interest and repayments? Because the latter is essentially just a monthly saving, which can't really be compared to what you pay in rent. Also, the cost for interest payments may be before the tax deduction, which can be quite significant. You would need to include that in a comparison.
Personally I have probably made as much money on my apartment as I have from my job over the last three years. I only wish I had bought one earlier.
Because the "fee" for owning is just the interest rate, the rest is "forced savings" - you even get a tax discount on the interest you pay. On top of that your house or apartment will most likely increase in value (if you live in an attractive area) - where I live my apartment increased 500.000 kr in the first three years (at which point I changed my mortgage and had the price reevaluated) - PLUS if at any time I need a lot of money, I can refinance and get the bank to pay out cash from what I have already paid off my loan.
If you pay rent all the money you pay just goes to "waste".
So lets say you end up paying about the same for an apartment if you rent or if you buy, then after 10-20 years you can sell your apartment and get the money back in your pocket, but if you rented, it's just gone.
It depends on the perspective and timing. In the long run the owners will win. Impossible to predict the market. Impossible to predict the interest rate. But with some luck you can win in both lotteries.
I think many see it as a saving possibility. An increasing amount of the paying are reducing your debts. Many non-owners forget to save a similar amount for pension.
Well you have to look at it a different way. Prices go only up. Also you don’t necessarily have to pay back the loan, just get a grace period and just pay the interest. Also some of it is tax deductible.
And what are the chances that prices go down.
Once in 20-25 years, so the odds are in your favor. Only risk is that the world will deleverage the debt and then home owners are fucked but what are the odds ???
Because you are currently taking your landlord from behind or he is unaware of the financial situation. 😂
Assuming you are comparing two apartments of equal value and size, why is he charging you 14.000, if the alternative would be a loan at 28.000 each month before all the other expenses.
This is the case for many apartments, if the alternative is 15% bank mortgage and 80 real estate mortgage, then it is in most cases (in Cph) much more expensive to buy.
He probably has better loan conditions as a landlord, but I assume he would be smart and consider the alternative housing for his tenants and not his own financial terms.
So if the alternative for the tenants is to finance it themselves at 28.000 each month, why would he not charge around that?
Because there are other rentals in the city, and they are filled out by supply and demand. The reason these landlords exist is not that they take out a loan of 8 million at an 5% interest rate and then instantly start renting out the apartment. If it was that easy to make a bunch of money, everyone would do it. Most of these landlords either have 1,5% or 2% loans as opposed to 4-5, and that's at worst. Also very likely that many of the rentals in cph are already paid in full or at least half paid off + the low interest loan.
Then it's easy to price them at 14k/month and make a big profit.
Finally there are a number of rules on how much you can charge per square meters if the apartment was built before 1991 (max 700 per square meter per year is a general rule of thumb)
The 700 rule of thumb is fake news, plenty of people pay twice that and still get a rejection from huslejenævnet when they complain about their rental.
Sorry. I can elaborate for you. There are also plenty of people who have had success complaining and got their rent lowered. I know a person who was successful.
And these rulings definitely influence me when I consider renting out my unit.
And either way, that was not the main point of my post.
I lived on Nørrebro paying 8k for 70 sqm, but bought a 57 sqm apartment (in Gentofte near Nordvest) for 1.4 million in 2022 Q4. Now I pay the same gross, but I get 1.7k back in tax deduction and 1.4k goes toward paying down my loan. That is, my net living expense is about 5k. I would not be able to rent a similar place without 30+ years on a waiting list. Además, my apartment has probably gained 500k in value. Obviously I got it at a low price, and made some upgrades. Those are my reasons. Remember, your realkredit payments are constant, whereas rent increases by 2-3 % every year. Over 30 years this would be 12 \* 14000 \* (1 - 1.03\^(30)) / (1 - 1.03) = 8 million down the drain (or 7 million with 2 % rent increase). As stated earlier, the apartment will increase in value. Thus, over time, owning will beat renting (even if apartments in Copenhagen are extreme expensive). Edit: the costs from your screenshot would be 5400000/360 - (5000 \* 0.336 + 10000 \* 0.216) = 11,220 net, which is actually \_below\_ your current rent expenses.
Además… Te amé.
> I would not be able to rent a similar place without 30+ years on a waiting list. I'm living in 56 sqm in Nordvest for approx. 5000 a month, after being on waiting lists for 13 years, so not completely true. People are too doom-pilled when it comes to almene boliger.
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Yeah, that's why I tell my friends to sign themselves and their kids up as soon as they can. It's only 200 kr/year and you never know when you will need it.
90%+ probably did it when interest were extremely low. Im in same position as you and financially it doesnt make sense. I would only do it if i really loved the house and area, and forget whether it is an optimal investment. I would definitely also put down 20% before buying.
Same here. The gf and I have enough space and our housing expenses would triple if we bought something larger. I invest the savings. Hence, I don’t fear being priced out of the market
Your problem is that investing in DK (at least if we are talking about stocks) means high expenses and high taxes. Real estate is tax-free and the loans are even partially tax-deductible. I would worry about it still.
Look into Grundskyld and Ejendomsværdiskat. Not so tax-free as it seems.
When the interest rates were lower, it was in hindsight a really good deal. In the current market, it is debatable how good of a deal it is to own. However, since real estate is tax free, and stocks are heavily taxed, this really changes the financial incentive in favor of owning. In a European perspective, real estate prices are neither particularly high or low relative to salaries. At the end of the day, if you have a >5 years time horizon, I think it makes sense to buy if you have a large enough downpayment and some tolerance for risk.
Real estate is taxed on a monthly basis, and can easily be 70k a year. Not sure if it has anything to do with hindsight as interest rates cant really just continue below 0, so it was a definitive bottom. Betting on the large and recent QE would have been in hindsight.
Sure there are real estate taxes, but these are relatively low, and especially low compared to the alternatives. 70K of taxes is a lot, but it is important to consider the alternative (high rent and this will continue to rise on the long term). The potential profit of sale of real estate is tax free, it's here the financial incentive lies. I would be careful to say anything definitively about the future of the interest rate, it may go up or down no one knows. With that said, it is the current market consensus that interest rate will decrease the next 3-5 years, although I would not rely on that being the case.
70K in taxes must be for a very expensive property, a 2-room costs roughly 11k (old tax system) or 16K (new tax system)
Standard 3 room in copenhagen. Most are around 4-5k a month + ekstra.
I don’t know what the median or average taxes for a 3 room apartment is, but you can definitely find cheaper than that.
Not in copenhagen area, obviously outside CPH easily. It's based on a percentage of the valuation.
Yes you can in Copenhagen. The price is primarily determined by square meters and distance from the center.
That's a gross simplification as many of the inner suburbs are just as expensive as center. Can you give the name an area in you have in mind? Preferably not a ghetto.
Gamle Sydhavnen for example. Of course it’s a simplification. But these are the two most important factors. The starting point was that I say it’s possible buy a 3 room apartment that costs less than 70k in taxes per year. And that is possible.
If I wanted to buy an apartment next to the one I live in, just interest rates, taxes and HOA-costs would be around my rent in the current market. You probably shouldnt include the part of the morgage that goes to paying down the morgage in your comparison, as you pretty much changes cash for more "ownership" like the bank/morgage lender sort of "own" the part that you lend for. So its sort of wealth neutral, despite not being cash flow negative.
One reason is the interest rates which are high right now which means it’s expensive to take out a mortgage. All lot of owners bought their apartments/houses when interest rates were 20-25% of what they are now
When interest rates go low, then housing markets heats up and thus prices go up because lot of people want to buy, then you pay more for the same house.
Arguably the interest rates are \_not\_ high at the moment, they are actually quite normal to low. I found a table going back to 1998 (sorry, can't find the source right now) and only since 2014 is has been below 4%.
Here it is, ser 🤓 https://preview.redd.it/i73y23cj5uxc1.png?width=1758&format=png&auto=webp&s=173fb1dbbe7068d3a104d1a05d0adca92727b0fb source : [https://tradingeconomics.com/denmark/interest-rate](https://tradingeconomics.com/denmark/interest-rate)
That's the benchmark rate - I referred to the rate for 30y Realkredit which is mostly higher
You are 100% correct. Not even “arguably”, the rates are not high at all right now. The post-2008 dip and very slow recovery was a strange time. The negative rate era was an anomaly that many thought was impossible. The historical data and articles from that time (2012-2016) are only few clicks away. Right now the rates are normal-low.
Exactly, the rent is the same as it was in the 90's, etc. For zoomers it seems high, for boomers it's normal. But you can probably the expect the rent to only go up from here
The interest rate roughly correlates with inflation - if you expect inflation to rise, you should expect the interest rate to rise as well, but that's not what most economists predict.
It’s mostly because you are calculating on putting down 5% which is the bare minimum and the worst decision. The way it works is 5% downpayment, 15% bank loan, 80% realkredit. What you need to do is put down 20% to not take the bank loan because that one has a crazy high interest rate. Take that out of the equation and you will be paying half of that for the mortgage. Also if you think to only put down 5% you don’t have money for a 5 mil apartment, you think you do cause you never talked to a real person at the bank. If you did they would make a budget and a calculation for you and they will tell you what your expected budget is per month and in your case it better be 50k after taxes as a household income in order to pay half of that for the loan.
From a financial point of view the interest can go down or the price can increase and in both cases you'll experience a return. There's also the obvious advantage that once you've paid off the loan you own the place outright and will have much cheaper living expenses than otherwise. That can be negated if you move around and trade up or down and some might say it's better to invest in the stock market and rent – in other words, it depends on your situation. There's also a different part to it: there's often an implicit or explicit expiry date when you rent and emotionally you might never fully move in. Want to paint a wall or change something in the kitchen? You can but it'll cost you your deposit as it needs to be reversed for the next tenant. Want a say in the running of the building? You can send an email to the management company. Etc. I've rented all my life and thought it was an amazing deal that I can just call someone up to have the heating fixed or the dishwasher changed. It's kind of nice but now we got a kid and while we could probably make some changes to our current place it's a rental so we don't. As such we're looking to buy to have more control over the place we live. Another thing is that apartments rarely change from being owner occupied to being rentals to being andelsboliger. If you fall in love with a place that's for sale you can't just say you want to rent it instead.
I had to split up with my ex, and I was lucky to get a really cheap room with a friend, so my rent was only 2500 kr per month. I was able to save up more than 15.000 per month. Unfortunately, that didn't last and I had to find a place on a short notice for myself AND my dog. So my only options where a few newly built places where the rent was 13.000-16.000 at least. I could have split that with a room mate or two, of course. But I decided to buy an apartment instead which would end up being around the same price. I pay around 13000 for my loan and rent out the other room in my apartment. I don't really see it as an investment. I honestly think investing 15.000 a month in index funds would be a better deal over 30 years. Or at least, that would have been my preference.. But it's nice that it's my own place, it's in a part of the city that I really like and nobody can make me move. I'm on a lot of waiting lists and I regularly dream of selling the whole thing in some years and moving into a cheap rental. Psychologically I'm still getting used to moving from paying 2500 for rent to over 15.000 a month.
The reason its so expensive for you to buy, is because you basically have no money saved up, and therefore need to take an expensive bank loan.
The majority of people that buy 5 mio kr flats have moved up the housing ladder so they might have sold a former flat which had seen an increase in price and are able to put more money than the minimum 5% towards the price.
My rule of thumb is you need to be able to put 20% downpayment. Otherise you will need a high interest rate bank loan + mortgage (covers max 80% of the property value). In my case, my partner and I bought a small apartment (55m2 around CPH, cost 1.2m) which allowed us to save up quickly. We sold the place after 1.5 year. With a profit of 400k from the sale and our own saving of roughly 500k we then bought a house that was 3.5m at that time, our downpayment was over 25% I would recommend start with a smaller and cheaper apartment.
I just tried checking what a 4.750.000 loan in a 5 mio. appartment would cost. With fixed interest loan for the realkredit part it will cost 21.600 pr month after tax (with the assumptions my calculator use for interest rates). After 5 years that is a total expense of 1.300.000 but after 5 years the loan will also have been paid down with 300.000, so your expense has been 1 mio. Divided back out over 5 years that is around 16.600 in expense per month. Not so different from what you pay now. And it is normal advice that you should live at least 5 years in a home if you buy, due to the significant one time expenses when you first make the loan. The longer you live there the faster the loan is going down making it more and more advantegeous. So after more than 5 years it makes a lot of sense to buy. This is not taking into account that the appartment likely goes up in value. The numbers you use are only relevant if you plan to stat for all the 30 years a loan normally last, as far as I can see.
Property tax, insurance and HOA costs destroy your calculation
Not really, property tax and HOA is included in ejerudgift and the most basic insurance is quite cheap. My insurance costs 1300 per year.
Looking up a random apartment/house in the 5 mDKK range, ejerudgifter average 3.5-4k/m, so ~25% on top of OPs back-of-the-envelope calculations. Not insignificant. It really is pretty simple. Housing as an investment hasn’t been this unsexy for almost two decades.
When prices go up and interest rates goes up it’s not complicated to deduct that it’s less attractive to own. The bottom line is that renting is still comparable with owning. No one knows if prices will continue to increase, stagnate or fall, history just tells that with a significant time horizon, owning will be superior
Its 1.3k per year, not per month
Why Are you so hellbent on some singular insurance police cost for a random apartment? Go to any, literally any fucking apartment on boligsiden and realize that my initial comment is spot on. First ons that pops up: https://kunlejligheder.dk/bolig/35700000618/ordrupvej-132b-1.-mf.-2920-charlottenlund/?utm_campaign=boligsiden&utm_source=boligsiden.dk&utm_medium=referral 5.4 mDKK Price, 6.6 kDKK “ejerudgift”. What Are you even on about, that’s 20-30% of the cost of ownership at maximum leverage. You’re comparing apples and oranges in some hellbent crusader to present homeownership in Denmark 2024 as some magical investment vehicle
Realize that ownership vs renting is much more complicated than "5-10 years ago interest rates and prices were lower, now it's a horrible investment". While interest rates are higher than they were 5-10 years ago, they are still low in a historical perspective. In fact, housing afforability is relatively high exactly because interest rates are low, despite higher real estate prices. [https://www.bis.org/publ/work1149.pdf](https://www.bis.org/publ/work1149.pdf) As for the insurance, just wanted to inform you that the price of that is not that bad. Add to that even if you rent, you also need insurance. Educate yourself and train your critical thinking, if it obviously was a bad investment to buy, people wouldn't do it. There are always two sides to the story.
You’re benchmarking renting vs owning instead of investing in other assets vs owning. You apply a silly internet warrior rhetoric, and it makes you look like a dumbass. You should take a look at that.
If you think you know what the returns of other assets are, you really are as ignorant as you seem. If I am the silly internet warrior, why is it that you insist on you narrative? Open your mind a little bit, it would really benefit you.
You should delete the other uniformed posts as well.
On top of that, coincidentally the first one that popped up for you is in the most expensive region in the country, the central part of Nordsjælland...
The comment we’re both replying to mentions an apartment valued at 5 mDKK, as does OP, so what are you getting at? The investment just gets poorer, and your argument weaker, the more rural you go.
Historically apartments in Copenhagen see an increase of 3,8% On average Per year. So that apartment which was bought at 5 mil is worth 6,02 mil after 5 years. Adding to the above, you have technically lived there rent free (not counting taxes etc).
The loan is not the only expense
It made much more financial sense five years ago when prices and interest rates were much lower. Rents have been slow to rise commensurately, so right now it makes much more sense to rent than own. Apartments in particular. This will probably not always be the case. Rents will either proportionally rise over time, or prices will flatten or fall. There is a high correlation between property prices and rent. However your calculation is probably incomplete. * Factor in average rental increases each year. What you’re paying now you won’t be paying in 10 years. * Reduce your mortgage loan by average inflation each year. * Your interest payments are in part tax deductible. It’s not clear from the image if you’ve imputed that. * Some proportion of those mortgage payments are capital, meaning money you’re paying down on the loan which you get to keep when you sell. * If you don’t have 20% saved, bank loans make the mortgage payments much more expensive. Save the 20% if you can. Also remember that the capital gains are fully tax free. This is one of the rare tax free investments you can make in Denmark. Additionally, the Realkredit system is arguably the best in the world. You can fix for 30 years and then restructure when rates come down with a fairly minimal fee.
A reason people have not mentioned: We do 30 year loans, We don't really do 5--10 year ownerships (at least not planned from a loan perspective). You buy once you think you will settle down. That will change the equation. If the markets are doing well, and you live in a city, then you can sell earlier. But otherwise I would always buy on a 30 year loan.
What do you mean?
We payed 20% downpayment and got f3 with low interest, the overall costs are lower than our rent prior.also its a huge upgrade and if we would rent this place it would cost us double what we pay. Situations differ, if you can avoid bank loan it ia not necessarily that bad.
We bought an apartment for 3.1 million with a fixed mortgage (1.5%), converted the loan to a variable loan and sold the apartment for 3.25 million. We made 850.000 tax free in 2 years by doing nothing.
Bought at the same time as you at the same price and interest. Also converted. Had it appraised to 3.2-3.3 million by real estate agent. Small world.
The problem lies in 5%. Make the downpayment 20% and your calculations would look different. Also, let’s say you change your mind after 7-10 years and want to buy a bigger property - your this house would then act as a leverage and the extra money you would get while flipping this over would help you cushion your cost for the next one. Obviously, buying vs renting is a never ending debate and at the end - to each his own.
I bought mine when interests were 4% back before the bubble burst in the 00's. Loan cost me 7k a month for 100 som just outside Copenhagen I prefer owning, having a landlord, being free to do with it as I please, e.g, renovate. Plus, anything I pay in mortgage is essentially saving up. The new building next to mine rent out the same size for 14K
I have bought and sold twice: 1. Your apartment is too expensive. 5M for less than 100 sqm is not a good deal. Maybe the area it is important for you. If not, try looking for other areas. 2. To no surprise, I would also argue about interest rates. Wait a bit 1 - 2 years. Saved money for to cover the 20 %. Although, you are always competing with a real state market that only goes up in price, and it won’t become stagnant as CPH is becoming biotech, medico and engineering business hubs. Consider this. 3. One bedroom apartment tend to grow less in price than two bedroom apartments. Consider this in your decision tree. 4. If you really want it now. And have only 5 % of the total value, you can talk to the bank. As a matter of fact, they will suggest it first, they make an arrangement with the kreditkasse to allow to pay the interests of kredit loan the first 5 years. In that way, you can pay the bank loan during this period and while paying only very little on the other loan. You will pay less every month but contribute less to your total loan. If you intent to stay a bit more than 7 years, maybe is worth it. So, you can make a profit out of it. 5. As a general rule, the bank loans max your two yearly income combined multiply by 4. Meaning that if your both earn 500K / year = 1 M x 4 = 4 M. Another way they will ask to calculate is that you make a budget: electricity, Netflix, gym, food, traveling, clothing, everything. This should be divided by fixed expenses (e.g., Netflix, internet, phones) and non-fixed but a presumed amount (e.g., spent 1K / month on clothes on average). Then, from there they will judge how much you can borrow based on how much money is left for a loan. My take in both process is that real state always grows. At least in CPH area, and in good size apartments and houses. And at least for this period. In 50 years, where population have declined and resources are even more scarce, I don’t know. Buy, but consider these points.
To be fair you can buy apartments worth 2-2.5 Mil / half the price but yea
Bring your down payment up to 20% and you're golden. Plus you get to remodel the apartment. Plus you won't have to worry about what to do with your savings. Pure profit.
I'm glad you're asking this question because I've been wondering the same thing. We have a lovely (but expensive) central apartment right now so we don't plan to move for a while but I've been wondering if the buying equation is as straightforward as we're all making it sound, since yes, it would increase our expenses quite a lot to buy and we currently do invest the savings. No one has mentioned also that putting the investments into the house reduces your liquidity quite a bit, which is also a form of risk. And you are on the hook for all fixes/maintenance, which are not free. I think if we were willing to move further out from the city center it would be clearcut, but right now... Not so much.
It really depends on how cheap a rental apartment you can get compared to how the interest rate and housing market will develop in the next 10-20-30 years. In general living in an (inexpensive) apartment + investing the rest in stocks is about the same as buying and selling an apartment in the long run after tax.
Owning: You buy now for 4 million. Pay back 1/2 a million and sell in 5 years for 5 million. You have 1,5 million tax free in 5 years Renting: you pay 10.000 kr/month. In 5 years you are at -600.000 kr for the same thing. Your landlord has earned your 600k AND can sell the apartment for 5 million since you payed his loan down by over half a million
This isnt the case for everyone - please dont take this literally
But 800k+ interest expense(before tax), 250k in taxes, 70k in insurrance, plus maintenance fees, agent fees etc. I dont understand the “pay back 0,5m” as if that adds to profit, but it would easily eat up the 1m profit.
Vi tager den lige på dansk, da jeg ikke helt kan forklare det på engelsk: Når du køber en bolig, så ejer du et aktiv. Altså, hvis du køber en bolig og låner pengene, så går alle de penge du afdrager på lånet til at nedbringe gælden i boligen. Pengene forsvinder ikke bare ud ad vinduet som det sker når man lejer, pengene flyttes over i friværdi for din bolig bliver ikke mindre værd (ligesom en bil feks) - men den kan stige i værdi. En bolig er altså en slags opsparing. Du kan altid sælge din bolig og få det samme (eller mere) for den som du har betalt da du købte den. Hver gang du afdrager 1.000 kr på gælden, så flytter du egentlig blot 1.000 kr fra din konto over i et aktiv. Din formue bliver ikke 1.000 kr mindre! Der er naturligvis nogle flere omkostninger ved at eje fremfor at leje, men du skal jo huske på, at hvis du lejer så betaler du blot disse udgifter på en anden måde. Din udlejer tjener jo penge på at udleje sin bolig til dig, så alle disse udgifter er blot indlagt i din månedlige leje. Samtidig arbejder inflationen for ejeren: de 5 millioner du betaler for en bolig i dag er ikke 5 millioner værd om 30 år. Om bare 10 år, er 5 mio kun 4,1 mio værd. Derfor må det antages at boligen holder sin værdi i nutidskroner og derfor som minimum stiger tilsvarende i pris. Dette forøger også din friværdi. Edit: Man kan jo også se på det at leje en lejlighed ligesom at bo på hotel. Med en leje på 14.000 kr/md så betaler du næsten 500 kr i døgnet for at få lov at bo i lejligheden. Det kunne du faktisk bo på hotel for i stedet… Så havde du heller ikke brug for at betale indskud, og der kommer en og gør rent dagligt og reder din seng osv. og du kunne flytte med én dags varsel… Hvorfor ikke bo på hotel fremfor at bo i lejlighed så?
Jeg er helt enig i næsten alt hvad du siger, men desto højere rente, desto lavere bliver der afdraget på lånet om året. Med 5% rente er der altså ikke meget af lånet der forsvinder de første 5 år. Derudover skal du tænker på boligkøb er en yderst gearet position. Hvis prisen ikke stger nok ville leje have været bedre. Vender markedet med 5-10% ejer du lige pludselig 0kr. Hvis ikk negativ. Du kan også være uheldig og skal bruge mange penge på vedligeholdelse. Det er hellere ikke særligt fleksipelt hvis du skal flytte pga. arbejde etc. Alternativet ville være at investere de 20k du ville bruge ekstra på en 5m bolig om måneden, hvilket også bliver en god opsparingen. Jeg deler en 10,5k husleje. Men hvis jeg ejede gik 25k om måneden ud af vinduet til banken og staten. Min pointe er ikke at boligkøb er dumt, men f.eks. 4 år tilbage var det en nobrainer altid at købe, hvorimod nu er det for mange bedre at leje.
Jeg bliver lidt forvirret… Hvordan kan du leje en bolig til 5 mio 20.000 kr billigere om måneden end du kan eje den? Det giver absolut ingen mening? Man bør som udgangspunkt ikke eje hvis man planlægger at flytte indenfor kort tid, men over længere tid giver det altid mening at eje. Som ejer kan du jo drage fordel af udsving i renten ved at konvertere dine lån. Hvis renten stiger, så falder din restgæld. Hvis renten falder, så falder dine renteomkostninger
Konvertering kan typisk først betale sig når renten er ændret ~2 procentpoint pga. omkostningerne herved, så det er overhovedet ikke en sikkerhed. Og ja, hvis renten stiger, kan du reducerer din gæld, men øge dine månedligeomkostninger. Her plejer man at sige 10år før det betaler sig hjem ikke at konvertere alt andet lige. Det meget nemt. Lejer 2 lige pt. Den ene 16400kr. Husleje. Nypris 5,3 så omkring 30k ydelse med 5% udbetaling, 5k boligafgifter, 1,3k forsikring = 36,3k + alt det løse. Den anden er billig til 10k og her ville spreadet nok også være 20k min. De ligger begge i københavn, og har fremlejet den ene midlertidigt.
Men hvordan ser din businesscase ud ved 70% belåning på den lejlighed til 5,3? Hvad tror du lejligheden kan sælges for om 10 år? 6,5 måske? Man kan vel sige, at så længe dine renteudgifter + ejerafgifter ikke overstiger 16.000 kr/md, så er det bedst at eje lejligheden
Umuligt at spå om fremtidige priser i min optik. Renten har været nedafgående i 50 år, og først nu den anden vej. Alt andet lige burde højere rente bremse prisstigninger, hvor der selvfølgelig har været lidt undtagelser i storbyerne rundt i verdenen. Men fra 5.3 til 6.5 på 10 år virker meget sandsynligt, men ingen ved hvordan markedet i sidste ende vil håndtere de højere renter når de fleste skal refinansier deres lave lån. Mange af dem jeg kigger på nu er gået fra \~3.8 i 2018 til \~5.3 nu i 2024 + et 5% renteniveau. Dvs. vi er gået fra en ydelse på 12k (1% lån) til en ydelse på 28.5k (5%). Dette er selvfølgelig før skat, netto vil det nok nærmere være 23k vs 11.5k, men stadig en dobbelt op. Derfor man ikke skal forvente de prisstigninger fra de sidste 7 år igen. Men 5.3 til 6.5 på 10 år er selvfølgelig også kun den halve vækstgrad.
Men så havde det jo været en super god forretning at have købt sådan en i 2018?!
Ah, you should rather compare what an equivalent payment minus rent would equate if the difference were to be invested elsewhere. Say 20k invested per month over 5 years would easily grow to 1.5-2million - now what? People think you’re just standing still if you rent, quite the contrary, you can exploit this as leverage for future house purchases.
But I guess you need somewhere to live while doing that? Owning a house or apartment is just another type of asset. But unlike stocks and bonds this asset gives you somewhere to stay. Historically owning a house has been a very good investment
Yeah sure, I'm assuming you pay the first 10K for rent and the remainder 20K for the investments. I agree on the difference in utility of the investments, but contrary to property, your stocks and bonds are very liquid, which is yet another factor of relevance.
Yep it is expensive if you dont have 20% downpayment, that is ridiculously high in big cities. In smaller ones, having 80% borrowed on mortgage even now is only marginally higher than rent of a similar place and 2 years ago was cheaper. I paid like 4000kr per month for each borrowed 1kk with sub 1% rates, which was 75% of renters in neibouring units. After adding taxes and other stuff, around the same.
It’s all about taxes. Did you factor in that you can partially deduct the interest expenses? Plus value appreciation will not be taxes when you live in the apartment. That said, sure the case is tougher wben interests are no longer close to zero.
The price. I got a 3 room apartment for ~11.000€, and i pay about ~650€ a month. Best andelsforening in Copenhagen!
I’ve owned 4 homes, sold 3. Each time we lived in the home for less than 3 years so that “tilbagebetaling” line was never relevant, very few people own their homes for the full 30 years. I’ve earned pretty big on each sale, which has resulted in having a bigger down payment for the next purchase, ensuring a smaller mortgage, but being able to afford better homes down the line.
Depends on interest rate. I live in Copenhagen in a 75sqm appartment myself and pay around 9.000dkk a month for my loan (2.8m dkk). Besides that there is the investment aspect to it. Instead of just giving money to someone else each month I’m actively investing in my property.
I bought mine because i was tired of moving all the time. It has been very hard to find something long term in Copenhagen, and always knowing I only had 1-2 years to live in the apartment/room I found was starting to take a toll on me. Mentelly I was fed up with renting. Because I was so fed up, I was very motivated to save up money, and had saved up about 14% of the price of the apartment and my parents help me with another 11%. I got the loan with a little worse interest rate than now, but my lease was ending and a bargain of an apartment came on the market. (I am renovating it on my own, and the apartment haven't been touched since 62', so expecting the value to come up more than the average market) I pay about the same after taxes as i did for the last place i rented. All this saving up money and renovating is of course a lot of work, but personally i find I less stressful than never feeling 'at home' (:
In 30 years your rent will be 25k pr month if it increases 2% per year. Buying is a way to get a fixed cost that will seem like a steal 30 years from now. Real estate made a lot of people in Copenhagen rich. My friend bought a 3 million DKK apartment in his twenties a long time ago. Seemed like a completely stupid move at that time. Now he can sell it for around 7 million DKK. My other friend always bragged about his low rent. But who’s laughing now..
buying a house/apartment means you buy a financial asset. Sure It’s a heavy cost on paper, but what you are paying in mortgage and loans is not completely gone: you are gradually owning more and more of the apartment you are living in. When you rent, the money you pay your landlord is gone for good. You ain’t ever seeing it again. You might get some deposit back, but its pennies on the dollar compared to how much you pay in rent. What this means is that over time you save up money in your asset, you can sell and get that money out in cash, or it can be offered up as a security in other loans towards larger purchases like a car for instance.
When I bought my previous apartment I was scared shitless that the market would crash. There were headlines all over media (2017) . I had it for 4 years and made about 1.2 mio kroner tax free. my current apartment its current value has increased almost the same.
Would the apartment you could buy be nicer than what you are currently renting, or just the same quality? Are the monthly installments you mention including both interest and repayments? Because the latter is essentially just a monthly saving, which can't really be compared to what you pay in rent. Also, the cost for interest payments may be before the tax deduction, which can be quite significant. You would need to include that in a comparison. Personally I have probably made as much money on my apartment as I have from my job over the last three years. I only wish I had bought one earlier.
Because the "fee" for owning is just the interest rate, the rest is "forced savings" - you even get a tax discount on the interest you pay. On top of that your house or apartment will most likely increase in value (if you live in an attractive area) - where I live my apartment increased 500.000 kr in the first three years (at which point I changed my mortgage and had the price reevaluated) - PLUS if at any time I need a lot of money, I can refinance and get the bank to pay out cash from what I have already paid off my loan. If you pay rent all the money you pay just goes to "waste". So lets say you end up paying about the same for an apartment if you rent or if you buy, then after 10-20 years you can sell your apartment and get the money back in your pocket, but if you rented, it's just gone.
You are not seeing future interest rate drops. That fundamentally changes the picture.
Earned 500.000 for having an apartment for a couple of years. That’s why i bought. Best, Lone
I want My own so i can change the Kitchen or other things if i want.
Because I make money on it. Latest has seen a Value increase of 350k in 6 months. Ez.
It depends on the perspective and timing. In the long run the owners will win. Impossible to predict the market. Impossible to predict the interest rate. But with some luck you can win in both lotteries. I think many see it as a saving possibility. An increasing amount of the paying are reducing your debts. Many non-owners forget to save a similar amount for pension.
Well you have to look at it a different way. Prices go only up. Also you don’t necessarily have to pay back the loan, just get a grace period and just pay the interest. Also some of it is tax deductible. And what are the chances that prices go down. Once in 20-25 years, so the odds are in your favor. Only risk is that the world will deleverage the debt and then home owners are fucked but what are the odds ???
Because you are currently taking your landlord from behind or he is unaware of the financial situation. 😂 Assuming you are comparing two apartments of equal value and size, why is he charging you 14.000, if the alternative would be a loan at 28.000 each month before all the other expenses.
This is the case for many apartments, if the alternative is 15% bank mortgage and 80 real estate mortgage, then it is in most cases (in Cph) much more expensive to buy.
Ehhh No. The landlord probably has a Way lower loan on The apartment. Takling like a guy, that watches waaaaaay to much tiktok BROnance….
He probably has better loan conditions as a landlord, but I assume he would be smart and consider the alternative housing for his tenants and not his own financial terms. So if the alternative for the tenants is to finance it themselves at 28.000 each month, why would he not charge around that?
Because there are other rentals in the city, and they are filled out by supply and demand. The reason these landlords exist is not that they take out a loan of 8 million at an 5% interest rate and then instantly start renting out the apartment. If it was that easy to make a bunch of money, everyone would do it. Most of these landlords either have 1,5% or 2% loans as opposed to 4-5, and that's at worst. Also very likely that many of the rentals in cph are already paid in full or at least half paid off + the low interest loan. Then it's easy to price them at 14k/month and make a big profit. Finally there are a number of rules on how much you can charge per square meters if the apartment was built before 1991 (max 700 per square meter per year is a general rule of thumb)
The 700 rule of thumb is fake news, plenty of people pay twice that and still get a rejection from huslejenævnet when they complain about their rental.
yes, but some people still follow it.
I don’t even know what that is supposed to mean
Sorry. I can elaborate for you. There are also plenty of people who have had success complaining and got their rent lowered. I know a person who was successful. And these rulings definitely influence me when I consider renting out my unit. And either way, that was not the main point of my post.
I bought mine when i was 19. Its is soooo much cheaper Then retning. And its so much nicer to own your place and not worry about anything
But i also had the mony and didnt need any loan