Since the Central Bank of Iceland embarked on its current rate-cutting programme, Landsbankinn has led lending rate cuts to both individuals and corporates. At the same time, demand for Landsbankinn’s housing loans has increased significantly – the terms offered by the Bank are very competitive. Landsbankinn finances housing loans through, amongst other channels, the issuance of fixed-rate covered bonds on the bond market. The current interest rate changes are primarily a reflection of a significant yield increase on covered bonds since the previous interest rate changes.
Fixed rates on non-indexed 36-month housing loans increase by 0.15 percentage points (pp) and fixed rates on non-indexed 60-month housing loans by 0.20 pp. Interest on 36-month vehicle and equipment financing loans increase by 0.15 pp. Other lending rates remain unchanged.
Fixed deposit rates for 36 months increase by 0.15 pp and fixed deposit rates for 60 months by 0.20 pp. Changes will also be made to deposit rates on FX accounts in BGP, CAD and NOK.