Cheaper loans should get more people away from gas heating

Many home owners are currently thinking about how they will heat their home in the future, if today it is an oil or gas boiler that keeps the temperature up indoors.

A new partnership between the government and the financial sector will make it a little cheaper to borrow money to replace the oil or gas boiler with a greener alternative such as a heat pump. At the same time, it must be a push on the road to independence from Russian gas, said Business Minister Simon Kollerup (S) at a press conference on Friday.

- Around 400,000 Danish homes are currently heated with gas. As many as possible must switch to district heating. But the reality is that it is far from being a solution for everyone. Some must look for alternatives - green alternatives. Primarily in the areas in our country where there are longer distances between neighbours, said Simon Kollerup.

He recognizes that for many home owners, getting a heat pump will be a big investment. According to the Knowledge Center Bolius, it costs between DKK 100,000 and DKK 200,000. The government therefore proposes to remove the land registration tax on loans for green heat sources.

At the same time, according to the industry organization Finans Danmark, the financial sector will drop the fees for setting up the loans, and the interest rate will be lower than usual. Both parts will apply to creation in 2023 and 2024.

- We consider it to be a really important societal task, and we would like to be part of the financial sector in driving that transformation. In the banks and mortgage credit institutions, we really want to encourage our customers to accept these offers, and we are ready to help, said Carsten Egeriis, CEO of Danske Bank and chairman of Finans Danmark.

According to the Ministry of Business, the land registration fee is DKK 1,750 plus one percent of the amount you borrow. This means that the fee for a loan of DKK 100,000 is DKK 2,750.

Savings of up to DKK 10,000

According to Finans Danmark, the total savings will vary according to the type of loan, but it can be up to DKK 10,000 including the land registration tax.

According to subject expert Henrik Bisp from the Knowledge Center Bolius, a heat pump today costs between DKK 100,000 and 200,000 - it depends on the type of heat pump, the size of the house and how well it is insulated.

- If you have a small house that is well insulated, you may be lucky to be able to do it for less than DKK 100,000 for a heat pump and the installation, he says.

There are two types of heat pumps. The most widespread is a so-called air to water pump. It is also the cheapest solution. The second type with ground heating is a slightly more expensive solution, which also requires that you have some space in a garden to dig heating hoses into.

The rule of thumb is that it requires about twice as much space outside as you have inside. There is also a solution where the hoses are buried vertically in the ground, but it is also more expensive, says Henrik Bisp.

The partnership is part of the government's initiative "Danmark can do more II", which must now be negotiated in place with the parties in the Folketing.

Ritzau