Even Repayment Schedules for foreign-currency mortgages
Even Repayment Schedules enable people to reduce their debt service on foreign-currency loans temporarily and lessen the effect of currency fluctuations on individual repayments. They remove uncertainty by allowing the borrower to pay more equal amounts from month to month.
Even Repayment Schedules in a nutshell:
- The customer pays the same ISK amount as was due on 2 May 2008.
- The payment amount changes in step with the Repayment Equalisation Index, which is calculated by Statistics Iceland and published on its website.
- The balance is added to the back of the loan term, which lengthens or shortens it depending on the situation.
Instead of an unpredictable debt service each month due to an unstable exchange rate, repayments are evened out over the loan term, which can lengthen or shorten depending on how the ISK exchange rate develops. The ISK's strengthening means a shorter loan term and its weakening means a longer loan term. The Even Repayment Schedule can be cancelled at any time.
Íslandsbanki customers can apply for an Even Repayment Schedule as of today at all of the bank's branches.
Birna Einarsdóttir, CEO of Íslandsbanki:
"Many households are facing difficulty in servicing their foreign-currency loans. In my view, it's important that the banks show initiative and come up with solutions. After all, the banks are the customer's first line of support and know their needs and wishes better than most others."