You can easily apply for a loan through our app or website. The process is simple and in four steps. Following each step, you can take a brake and pick up later at any time.

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.

Book an appointment with our advisors if you need any assistance with the application.

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

The maximum term of non-indexed loans is 40 years. Inflation-indexed loans have a maximum term of 25 years but 30 years for first-time buyers.

The maximum term of supplementary loans is 25 years.

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.

Housing mortgages can cover up to 80% of the purchase of an asset, with a 60% basic loan and 20% supplementary loan. First-time buyers can borrow 85%, a 60% basic loan and 25% supplementary loan.

For refinancing, the maximum mortgage is 70% of registered real estate value, a 60% basic loan and 10% supplementary loan.

While the loan amount is based on the outcome of your credit assessment, the maximum amount of a basic loan cannot exceed ISK 70,000,000 or the combined fire insurance assessment value and the lot value.

You should also be aware that the Central Bank has introduced rules about capping debt service 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. Read the FAQ item on Central Bank rules on debt service ratio, for further information.

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

The Central Bank of Iceland has set rules that place a cap on debt service to income ratios on consumer mortgages. This means that monthly payments on new mortgage loans may not exceed 35% of the borrower’s disposable monthly income. For first-time buyers, the maximum is set at 40%.

Calculations of the debt service to income ratio for non-indexed mortgages are based on a loan term of 40 years and the negotiated interest rate but with a minimum of 5.5% interest, while indexed mortgages are based on a loan term of 25 years and the negotiated interest but with a minimum of 3% interest.

Further information on the rules (in Icelandic)

With equal instalments, the same amount is paid to the principal of a loan, with accumulated interest added to the instalment. This leads to steady asset formation over the loan term. Debt service is higher initially and decreases with time to finally be lower than debt service on an annuity. 

Equal instalments (annuity) mean that you equalise your monthly debt service. 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. Annuity means that payments are equal on each due date, excepting indexation. Repayment of the principal is very slow in the beginning and asset formation speeds up towards the end of the loan term.

Interest rates can be fixed for 36 or 60-month periods while variable rates are based on the interest rate tariff at each time. When a fixed-rate period ends, the interest automatically reverts to a variable rate if a decision is not made to renew the fixed-rate period. 

A borrowing charge of ... is charged on both new loans and refinancing.

The borrowing charge on housing and real estate mortgages indexed to a foreign currency is ....  

There is also cost associated with the credit assessment and public registration of documents.

We cancel the borrowing charge for first-time buyers. If two parties are purchasing real estate together and one of them is a first-time buyer, the borrowing charge is also cancelled.

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

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

• The pre-payment penalty can at a maximum amount to 0.2% for each whole year outstanding on a fixed-rate period and never exceed 1% of the pre-paid amount.
• Pre-payment of up to ISK 1,000,000 per calendar year can be made without incurring a pre-payment charge.

Pre-payment penalties vary between credit institutions.

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

Anybody can apply for a housing mortgage but approval is contingent on creditworthiness and the result of Landsbankinn’s own credit assessment, regardless of where other banking business is hosted.

Before applying for a housing mortgage, the first step is to complete a credit assessment to gain an understanding of the situation and options.

You should also be aware that the Central Bank has introduced rules about capping debt service 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. Read the FAQ item on Central Bank rules on debt service ratio for further information.

In order to be creditworthy, no default or reported arrears can be registered to your name, you may only be moderately indebted and your payment capacity adequate.

Moderate indebtedness and savings positively impact credit assessment while any defaults have a negative effect. To maintain a good credit rating, it is necessary to keep borrowing within your ability to repay, and to make payments on loans at the prescribed time.

Housing mortgages are only issued for a single property, the domicile of the borrower. Real estate mortgages are available to persons who are buying a second property, both residential housing and other real estate types. Other terms and conditions apply to the mortgage ratio but the same rules on creditworthiness and credit assessment apply as to housing mortgages.

If you have a basic loan with variable rates you can request to switch to fixed rates. The interest rate is then fixed according to the rate on offer each time. An addendum that requires public registration is added to the loan agreement. Once you’ve received notice that the addendum is ready to sign in one of our branches, you have up to 30 days to return it signed to the Bank.

Note that the interest rate on supplementary loans can only be fixed upon borrowing.

Interest is determined by the combined mortgage ratio. If the mortgage ratio is under 60% of registered real estate value, you pay lower interest. The interest rate is even lower if the mortgage ratio is below 50% of registered real estate value. For details, see the interest rate tariff.

You can apply to fix rates in Landsbankinn's app or by making an appointment for financial advice.

The interest rate on housing mortgages is determined by the current interest rate tariff at each time.

The interest terms will be determined by the current interest rate tariff at the time you apply for fixed rates. It is possible to apply to fix the interest rate on all basic loans.

Make an appointment for financial advice and we’ll check to see if your mortgage is eligible for transfer between properties.