Most people finance the purchase of real-estate property and housing construction with mortgages, and they need to investigate what kinds of terms are available.

Borrowing options

  • Mortgages are offered by various credit institutions:
  • Housing Financing Fund,
  • Commercial banks and saving banks,
  • Pension funds.
  • Most credit institutions require that a payment ability evaluation accompany loan applications. The payment ability evaluation is a calculation of the borrower's ability to pay and his or her borrowing needs; in other words, an assessment of how expensive a property the person in question will be able to buy based on the value of his or her assets, income and expenses.
  • Borrowers with the Housing Financing Fund will be able to prepare their own evaluation of their ability to pay on the Internet, or they can receive assistance with this over the telephone or at the Fund's facilities. Other lenders usually prepare the evaluation of payment ability for their customers.
  • The Housing Financing Fund offers loans to individuals to buy, construct or make improvements on their own accommodation. The residents of Iceland have the same right to obtain the Fund's housing loans, regardless of where in Iceland they live.
  • The Housing Complaints Committee decides on disputes regarding the decisions of the Housing Financing Fund.

About housing loans

  • All house-purchasing loans are mortgages, which means that they are secured with a mortgage in the property to be purchased or in other real-estate properties.
  • When a decision is being made as to how large a mortgage will be granted for a house purchase, the reference points are usually the borrower's payment ability and the price of the property. Lenders will also view the assessment of the property to be purchased or mortgaged.
  • The payment load of the loan, meaning the value of installments, is determined by the interest on the mortgage and the repayment term.
  • If payment difficulties arise it is possible to seek advice and remedial action from
  • Housing Financing Fund,
  • credit institutions,
  • the social services of local communities, and
  • The Domestic Dept Advisory Service

Links of interest

Laws and regulations