No conditions are set as to what the loan can be used for, except in the case of conditional authorisations for a mortgage.
Inflation-indexed mortgages
Loan terms are 5 to 25 years on indexed loans and 5 to 40 years on indexed loans for first-time buyers.
The fund’s board sets the interest rates and any changes to them in accordance with the detailed provisions in the bond terms.
What's the difference between equal instalments and equal (amortised) payments?
Equal payments
If a loan is amortised, the payments you make will be equal throughout the repayment period. On the other hand, the relative amount of the instalment on the principal and the interest paid will change. The principal decreases more slowly than if equal instalments are paid.
Equal instalments
For loans with equal instalments, the amount paid towards the principal in each payment is the same. The debt service is therefore greatest at the beginning but decreases as the loan term progresses.
Frequently asked questions
For what purpose can I use the loan?
Can I pay off the loan or make payments toward the principal?
Yes, loans can be paid off or additional payments made at any time without any prepayment charge.
To make a loan repayment, you need to log in to My Pages using electronic ID, og to the loan status section, and select „repay loan“
To make a payment toward a loan, you need to log in to My Pages using electronic ID, go to the loan status section, and select “make a payment toward the loan.”
Does my spouse/partner have to be a co-borrower?
Yes, in those cases where he/she owns a share together with the borrower in the property to be mortgaged or the entire property. Your spouse/partner must also be co-borrower if he/she is included in the credit assessment with you.
Can I take out a loan on a property which is partly owned by someone else?
If a person other than a spouse or life partner, i.e. who is married to or in a registered partnership with the borrower, is the borrower's co-owner of the property a mortgage cannot be granted for that property.
Possible consequences if obligations under a loan contract are not met
If a debtor cannot pay the loan instalments, interest or indexation on the due date, the entire loan falls due without prior notice. The debtor will have to pay penalty interest from the due date, at the rate determined by the Central Bank of Iceland, as provided for in the first paragraph of Art. 6 of Act No. 38/2001, if he/she fails to make a payment on time, in addition to all the costs resulting from the default.
The final outcome could be that your home may have to be sold at a forced auction if you fail to make your payments.
