Question 1

Can I apply for a mortgage?

Accepted Answer

Individuals intending to buy or refinance a home for own use can apply. Íslandsbanki will have first lien position or equal lien on the property. The financial status of the applicant and property price are considered each time. Each applicant must successfully complete a credit evaluation. Mortgages are only offered for fully constructed properties. The property must have reached construction stage B4.

Question 2

Can I apply for an additional mortgage?

Accepted Answer

We offer an extra loan of up to ISK 7 million to help you take that first step. See more info on additional loans.

Question 3

Can I make extra payments on my loan?

Accepted Answer

You can make extra payments on your loan. The minimum amount is ISK 1,000. Making extra payments can reduce the repayment period. See further instructions on extra payments.

Question 4

Can I use my extra pension to pay towards my current mortgage or to buy a new home?

Accepted Answer

An extra pension can be used towards your current mortgage or buying a new home. Click here to apply for this option. There are two options available to first time buyers: the Principal option or the Mixed option. See more.

Question 5

Do I need to complete a credit check to refinance?

Accepted Answer

Yes, you need to complete a credit check to refinance, you can apply for a credit check and refinance electronically.

Question 6

Does Íslandsbanki offer protection cover?

Accepted Answer

We offer a mortgage insurance plan, to our mortgage customers, so that they can look after their loved ones after they are gone. You can decide the amount to be paid on death. Mortgage protection is tax-free and index-adjusted. See more on Mortgage Protection Cover.

Question 7

Does it pay to refinance?

Accepted Answer

You should always review the Terms and Conditions of your existing loans before refinancing. Does the existing loan carry a prepayment fee? Paying the prepayment fee might be worth it as you might be able to recover the costs with lower interest on the new loan. You can always book an appointment with one of our advisors if you need more advice.

Question 8

How does refinancing work?

Accepted Answer

The application process is electronic and you can apply for refinancing online in minutes. You will need an electronic ID to apply for refinancing online.

Question 9

Is it possible to transfer a mortgage to another property?

Accepted Answer

Yes, it is possible to request to transfer a mortgage to another property.

Question 10

Loan period

Accepted Answer

We offer a basic mortgage with a pay back period of up to 40 years. You can also apply for an additional mortgage that can be paid over a period 40 years as well.

Question 11

Under what circumstances is no overpayment and prepayment fee charged on mortgages?

Accepted Answer

No prepayment fee is charged if the loan carries variable interst rate. Loans with with variable interst rate do not carry a prepayment fee. No prepayment fee is charged if the interest rate on the loan is equal to or lower than the interest rate on new comparable loans with Íslandsbanki
Example: Customer has fixed rate mortgage that is 4.5% today, while a new fixed mortgage carries 4.85%. Since the interest rate on a new loan are higher than the existing loan, no prepayment fee is charged.

Question 12

What are the excess and prepayment fees?

Accepted Answer

The prepayment fee is a special fee that the bank charges to meet the costs it incurs when the borrower pays out a loan before the estimated time or its due date. The prepayment fee is according to the Bank's price list at any given time and may be a maximum of 1%. You can see more information in the bank's price list. Íslandsbanki's fixed rate mortgages carry a prepayment charge while interest rates are fixed, but variable rate loans carry no prepayment fee. You can always pay off a loan or pay extra on it at any time during the loan period, regardless of whether your loan has a prepayment fee or not. You can pay 1,000,000 kr. additional for fixed rate mortgages each year (12 month period) without paying any over payment fee. There is no over payment charge on mortgages that are at floating rates.

Question 13

What is the best time to refinance?

Accepted Answer

If interest rates have dropped since you originally took out a loan If you want to lower your monthly payments If you want to increase asset formation and pay down the loan faster If you want to apply for additional funding on better terms, e.g. due to construction If you want to change your credit type or change your loan composition

Question 14

What is the maximum amount I can borrow?

Accepted Answer

You can borrow a maximum of ISK 75 million. If you require a loan that exceeds the maximum you can book an appointment with our advisors and we will look into it with you.

Question 15

What is the maximum amount you can borrow?

Accepted Answer

The maximum mortgage amount is ISK 75 million. Specific regulations apply to loans over ISK 75 million.

Question 16

What is the maximum loan-to-value ratio?

Accepted Answer

We offer up to 70% of the real estate valuation if you wish to refinance your home.

Question 17

What is the mortgage-value-ratio?

Accepted Answer

We lend up to 80% of the property value of your home. First time buyers can take an additional loan of up to ISK 7 million but the total amount cannot exceed 90% of the property value. We can lend up to 70% of real estate valuation when you refinance.

Question 18

What other costs are associated with taking a mortgage?

Accepted Answer

The standard mortgage fee is ISK 64,900 but there is no fee for first time buyers Registration fee Mortgage issuance fee Credit evaluation fee Lien check fee Loan overview fee

Question 19

Who can apply for a mortgage from Íslandsbanki?

Accepted Answer

Individuals who want to buy real estate for their own use or refinance existing loans can apply for a mortgage loan from us.

FAQs on your mortgage