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, 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.

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.

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.

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.