Hojgaard collapses on home soil to open door for Penge to clinch Danish Championship
Hojgaard looked set to breeze to his second victory in this event in three years when he opened up a four-shot lead by the sixth hole.
However Penge, who birdied the third and eighth, was in a share of the lead after the Dane dropped a shot at the seventh and double bogeyed at the ninth.
The Englishman moved ahead when Hojgaard bogeyed the 10th and extended his lead to two with a brilliant birdie at the 13th.
Penge left the door ajar with his only bogey of the day at the 16th, but instantly responded with a birdie at the penultimate hole to restore his two-shot advantage at 15 under.
Hojgaard piled on the pressure with a clutch eagle at the par-five last to draw level, but Penge kept his cool to drain his birdie putt and triumph at Fureso Golf Klub.
"I've been playing so well this year," Penge said. "You know, coming back from my time off, to have won so soon (after that) and to achieve what I've achieved since I won.
"My main goal after I won was to not get complacent and drop off basically. My team have been a massive support for me, my family, everyone involved really.
"It's made me keep striving for more and this is amazing. And Rasmus, he's some player, to hit the shot he hit into the last and make eagle and basically make me have to win it was unbelievable."
Ben Schmidt, who hails from Rotherham, parred the 72nd hole to earn solo third at 12 under following a final-round 68.
Penge had two more reasons to celebrate in Copenhagen after his success saw him top the Closing Swing rankings, earning 200,000 US dollars (£148,000) and entry to the final nine events of the DP World Tour campaign, in addition to claiming the 10,000 US dollars (£7,400) on offer for setting the course round of 64 during his first round.
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