Arion Bank publishes recalculations of FX-denominated mortgages, including detailed information on the options available

Arion Bank has recalculated the majority of its FX-denominated mortgages to individuals and published the results on its online bank. The Bank will continue to enable its customers to see the recalculations of mortgages denominated in foreign currencies online until 26 February 2011 when the recalculations will be completed.

In Arion Bank’s online banking service, customers can examine in detail the four options available to them regarding the recalculation of mortgages in foreign currencies and decide which one best suits them in terms of debt burden, total payments to maturity etc.

The recalculation of the mortgages is in line with a law passed by the Icelandic parliament. However, Arion Bank goes further than stipulated by the law as all FX-denominated mortgages to individuals will be recalculated. The average reduction of the principal of the Bank’s FX-denominated mortgages is 35%, primarily determined by the currency mix of the mortgage on the date of borrowing.

The options available to the Bank’s customers following the recalculation of fx-denominated mortgages are:

Option 1: Non-indexed loan with equal repayments.

Option 2: Indexed loan with equal repayments.

Option 3: Non-indexed annuity loan.

Option 4: Indexed annuity loan.

In addition to these options, customers can choose to keep their mortgage unchanged, whether it be an original mortgage or a loan which has been restructured after a customer has taken advantage of one of the Bank's solutions.

Customers can find all further information on the options available and the impact on customers’ repayments and loan principal via the online banking service. In addition, customers are encouraged to contact a financial adviser if they have any questions regarding the recalculation or wish to look into other options.

Customers who wish to choose one of the above options need to do so by 28 March. Customers who do not have access to online banking will be sent the recalculation by letter.
The Bank will complete its recalculation of FX-denominated mortgages by 26 February 2011.