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 transfer a mortgage to another property?

Accepted Answer

Yes, you can request to transfer your mortgage to another property. Each request is assessed individually.

Question 5

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

Accepted Answer

The private 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. Learn more.

Question 6

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 7

Does Íslandsbanki offer mortgage protection cover?

Accepted Answer

We offer mortgage protection cover to our mortgage customers, helping them protect their loved ones financially in the event of their death. You can choose the amount of cover you need. Mortgage protection cover is tax-free and index-adjusted. Find out more about Mortgage Protection Cover.

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

Loan period

Accepted Answer

We offer standard mortgages with a repayment term of up to 40 years. You can also apply for an additional mortgage with a repayment term of up to 40 years.

Question 10

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

Accepted Answer

No prepayment fee is charged if if your mortgage has a variable interest rate or if the interest rate on your existing fixed-rate mortgage is equal to or lower than the rate available on a comparable new fixed-rate mortgage offered by Íslandsbanki.  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 11

What are the 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 charge is set in accordance with the Bank's Price List in force at the time and is capped at 1%. You can find further 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. For fixed-rate mortgages, you can make additional repayments of up to ISK 1,000,000 in each 12-month period without incurring an early repayment charge. There is no limit on additional repayments for variable-rate mortgages.

Question 12

What is the maximum amount I can borrow?

Accepted Answer

You can borrow up to ISK 75 million. If you require a loan above this amount, you can book an appointment with one of our advisers and we will discuss your options with you.

Question 13

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 14

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 15

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. For refinancing, we can lend up to 70% of the property’s assessed value.

Question 16

What other costs are associated with taking out 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 17

What should I consider before refinancing?

Accepted Answer

Before refinancing, you should always review the terms and conditions of your existing loan, including whether an early repayment charge applies. Even if your current mortgage is subject to an early repayment charge, refinancing may still be worthwhile if the savings from a lower interest rate outweigh the cost of the charge. If you would like to discuss your options, you can book an appointment with one of our advisers.

Question 18

When should I consider refinancing?

Accepted Answer

Refinancing may be worth considering if: Interest rates have fallen since you took out your mortgage. You want to reduce your monthly repayments. You want to repay your loan more quickly and build up equity faster. You need to borrow additional funds, for example to finance construction or home improvements. You want to change your loan type or restructure your borrowing.

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