You can easily apply for a loan online. The first step is to complete a credit assessment which only takes a couple of minutes.

If you want to get a clearer picture of your payment capacity without completing a credit assessment, you can use the credit calculator to arrive at an estimate.

• Apply for a loan
• More about credit assessments
• Book a consultation

Housing mortgages can cover up to 80% of the purchase of an asset. We finance up to 85% of the purchase price for first-time buyers.

For refinancing, the maximum mortgage is 70% of registered real estate value.

The loan must be secured by first mortgage rights and/or continuous rights as of first mortgage rights.

The loan amount depends, among other things, on the outcome of your credit assessment and the loan-to-value ratio of the property. While there is no defined maximum loan amount, in the case of very large loans, the Bank applies stricter requirements regarding the credit assessment outcome, including disposable income, good creditworthiness and maximum collateralization.

You should also be aware that the Central Bank has introduced rules about capping debt service on housing mortgages to a percentage of income for consumers. The cap on debt service for housing mortgages is set at 35% of monthly disposable income for consumers at the time of taking out a mortgage. The cap is raised to 40% for first-time real estate buyers.

Make an appointment to see us if you require a loan in excess of ISK 60 million.

Equal instalments entail that the part of the borrower’s instalment that goes directly to pay off the principal is fixed throughout the loan term, disregarding the impact of account. Accumulated interest is added to the instalment on the principal. Debt service is higher initially and decreases over time to finally be lower than debt service on an annuity. 

Equal payments (annuity) entail that the part of the borrower’s instalment that goes to the principal is fixed throughout the loan term, i.e. all instalments are equally high, disregarding the impact of inflation. You only pay a small amount to the principal initially while the interest is still high. As interest decreases, you pay more towards the principal and towards paying the loan off. Repayment of the principal is very slow in the beginning and asset formation speeds up towards the end of the loan term.

When you take a loan, you always pay interest on the outstanding amount of the debt. If you spread debt service over a longer period, you lower your payment burden yet pay interest throughout the period.

A shorter loan term means that you pay the loan off quicker and also shorten the time you pay interest. Shorter term loans are less expensive even though the debt service is higher.

What is the minimum interest on non-indexed housing mortgages?

Interest on a housing mortgages with variable interest rates are based on the CBI’s policy rate plus a fixed interest premium throughout the loan term.

The interest can never be lower than the fixed premium. This is what is referred to as the minimum interest on non-indexed housing mortgages.

When interest on non-indexed housing mortgages are fixed for 12, 36 or 60-month periods, the loan transitions to a variable interest rate that is also based on the above once the fixed period expires.

Loans that carry variable rates carry no pre-payment charge.

If your loan carries a fixed interest rate, a pre-payment charge may apply, yet only if the fixed rate on comparable loans is lower than on your loan.

• The pre-payment charge can at a maximum amount to 0.2% for each whole year outstanding on a fixed-rate period and never exceed 4% of the pre-paid amount.
• A pre-payment charge applies when payment is made toward a loan and when it is paid off in full.
• Pre-payment of up to ISK 1,000,000 per calendar year can be made without incurring a pre-payment charge.

Pre-payment charge vary between credit institutions.

Our advisors can help you figure out how the pre-payment charge affects your loan.