Not sure which bank is right for you? Read on to learn which factors you should keep in mind when choosing your bank, and how the largest Danish banks compare if you have just moved to Denmark as an expat or a student.
In this guide, you can read about:
- Which bank you should choose
- Why you should get several offers
- How to find the right bank
- How to know you're choosing the right bank
- Banking in Denmark as an expat or a student
- The largest banks and mortgage credit institutions in Denmark
Which bank should I choose?
Are you considering buying a home? And are you looking for the bank that best matches you and your needs? When considering a home purchase, it is natural to look at the market for home financing in terms of home loans, and thus which bank is best suited to finance your purchase.
To find the bank that is the best match for you, it is a good idea to get offers from several different banks, so you get an overview of your options.
Why should I get several offers?
In the Competition Council's latest report on the mortgage market, it is concluded that competition in home financing is low and that consumer mobility in the mortgage market is very low, corresponding to under 2% of all borrowers switching mortgage lender each year.
This means that the day you take out a bank loan, you are that bank's customer for many years. In other words, you become an unwitting consumer of financial products. This, combined with the fact that low competition is always a disadvantage for the consumer, is the primary reason the competition authorities clearly recommend surveying the market for financing in connection with your home purchase.
We know, however, that everyday life can easily override even the strongest recommendations and priorities, so that even the best intentions get ignored. But it should not be ignored. The conclusion should always be that you gather different offers. The only question should be whether you handle that yourself, or whether you want help and buyer's advice.
How do I find the right bank?
It will always be an individual assessment of your wishes and finances that determines which bank is best for you. It can be useful to draw on the experiences of people around you and learn about their choice of bank. As a starting point, the best solution is to investigate your options with the various banks yourself, to find out which bank best matches your needs.
In such a situation, we always recommend that you make use of independent advice to help clarify your options. Independent advice looks at, among other things:
- Which services you need
- What the bank's ethical foundation is, and in particular interpreting the banks' offers
- What significance it has for you, both now and in the longer term
Assessing your own needs is difficult because, as a consumer, you don't know what you don't know. But it is important to be aware of your needs and options, since that is precisely one of the basic conditions for achieving the best possible solution.
How do I know I'm choosing correctly?
As a consumer, it can be difficult to assess and compare solutions, service, price and offers from the different banks. It is important to fully understand the various banks' offers so you don't end up choosing the wrong one. Remember that the banks are trying to sell you their offer, so always stay critical.
Our experience at Bomae is that many people weigh solution and service more heavily than price. But all three parameters are important to consider when choosing which bank is best for you and your home purchase.
Banking in Denmark as an expat or a student
If you have just moved to Denmark, the first question is not which bank gives the best home loan, but how to get a Danish bank account at all. Without one, you can't receive your salary, pay your bills or be granted a home loan.
Why you need a Danish bank account
To take part in Danish society (receive your salary, pay taxes and borrow money), you need a Danish bank account. It also gives you access to online banking, savings, investments and Danish debit and credit cards.
Denmark is largely cashless. Besides card payments, Danes pay with MobilePay, the country's most popular mobile payment app. To use it, you connect one of your Danish accounts to your Danish phone number.
You must also register one of your accounts as your NemKonto ("easy account"). This is the account Danish authorities use for payments such as tax refunds and public benefits. Even if you only have one Danish account, you have to register it as your NemKonto yourself.
What you need to open a Danish bank account
Opening an account at a large Danish bank is fairly straightforward. You need:
- To be 18 or older
- Valid photo ID. Danish banks usually accept passports and national ID cards.
- A CPR number. You receive your Danish personal identification number when you register your address in Denmark.
- Proof of a Danish address
- Proof of employment or studies. Most banks ask for documentation of your occupation.
At most larger banks, you can open the account online or at a branch. The requirements vary slightly from bank to bank, so check them with the bank you choose. Read more about the CPR number and the other first steps in our guide on how to move to Denmark.
If you are an international student
As a student, you open an account in the same way as everyone else. Where an employee shows an employment contract, you show your admission letter or proof of enrolment. Several Danish banks have accounts for young people and students on different terms from their standard accounts, but the age limits and conditions differ between banks and change over time, so ask each bank what it offers you specifically.
Two things matter more for a student than for most: the fees on international transfers, if your money comes from home, and whether the bank will deal with you in English.
What to compare as an expat
As an expat in Denmark, one of the larger banks is often the most convenient choice, because they offer the full range of services and can usually serve you in English. Ask for English as your preferred language when you sign up. Otherwise your documents will arrive in Danish.
Terms and fees vary between banks, so it pays to compare. Look especially at:
- Monthly service fees and what they cover
- International transfers. Fees and exchange rates matter if you send money abroad regularly.
- Language. Whether the bank's online banking, documents and advisers are available in English.
- Loan terms. If you plan to buy a home, this is where banks differ the most, and where negotiation makes a real difference.
The largest banks in Denmark
Danske Bank
Danske Bank is Denmark's largest bank. It offers personal and corporate banking, wealth management and insurance, and has branches across the country, though the number is falling as banking moves online.
Nordea
Nordea is a Nordic financial group, headquartered in Helsinki, with operations across the Nordic countries. It offers banking, wealth management and insurance for private and corporate customers. Nordea can be a practical choice if you also have financial ties elsewhere in the Nordics.
Jyske Bank
Jyske Bank is one of Denmark's largest banks, named after its origins in Jutland. It is a full-service bank offering personal and corporate banking, mortgages and insurance.
Other Danish banks
Beyond the three largest, there are many other Danish banks, for example Nykredit Bank, Sydbank and Arbejdernes Landsbank, as well as a large number of local and regional banks. Several of them have no English website, which makes comparing them on your own harder.
Mortgage credit institutions
Most Danish home purchases are financed with a mortgage loan (realkreditlån) from a mortgage credit institution, topped up with a bank loan. The mortgage credit institutions are typically owned by or tied to the banks:
- Realkredit Danmark, part of the Danske Bank Group
- Nykredit Realkredit and Totalkredit, both part of the Nykredit Group. Totalkredit lends through a network of local and regional banks.
- Jyske Realkredit, part of the Jyske Bank Group
- Nordea Kredit, part of Nordea
- DLR Kredit, which lends mainly against agricultural and commercial property
Which institution you end up with usually follows from which bank you choose. That is one more reason to compare banks before you commit. Read more about how Danish home loans work and the loan approval certificate you should have before you make an offer.
Buying a home? Your bank choice matters more
The bank you choose shapes your loan terms for years. Comparing Danish banks is easier said than done, and if you are buying a home, the difference between them shows up in your loan costs every month.
At Bomae, we help many home buyers each year find the right bank for their purchase. We are on your side of the table: we collect offers from several banks and negotiate price and terms on your behalf, whether that ends with your current bank or a new one. Read why you won't get the best home loan at the bank on your own, or see our financial advice.
Also read:
- Rate lock: protect your home loan
- Green home loans
- Buying a home with no down payment: is it possible?
Have questions about choosing a bank? Book a free meeting and let's have a chat.
