Arion Bank offers competitive mortgages

Arion Bank is offering its customers competitive new mortgages. The loans bear fixed interest rates throughout the loan period which are better than the rates currently available on the Icelandic market.

There are two types of loans, both inflation-indexed. Firstly, loans of up to 60% of the loan-to-value ratio of the property with fixed interest of 4.30% and loan terms of 25 years or 40 years. Secondly, additional loans of 60% to 80% of the loan-to-value ratio of the property with fixed interest of 5.40% and a loan term of up to 25 years. Anyone who passes a credit check at the Bank is eligible to take a loan.

Höskuldur H. Ólafsson, CEO of Arion Bank:
“It is the job of financial institutions to offer their customers a broad range of financial services. Mortgages are an integral part of this product offering. Since it was founded the main focus at Arion Bank has been on resolving debt problems of its customers; this work has now almost been brought to completion. It is vital that we can offer our customers this new option for buying property and we want to go about it responsibly. Therefore the borrower will be required to provide at least 20% of the equity and must also pass a credit check. The interest rates on loans with a loan-to-value ratio of up to 60% are certainly competitive, while loans with a loan-to-value ratio of more than 60% bear higher interest rates and have a maximum term of 25 years. This arrangement should ensure that borrowers do not become too heavily indebted. Interest on the loans is competitive and by offering these loans Arion Bank is responding to customers’ demands for a wider range of loan options."

Home Loan I - up to 60% LTV

• Fixed interest of 4.30% throughout loan term
• Loan term of 25 years or 40 years
• Inflation-indexed
• Bank has first lien on property
• Borrowing fees 1%
• Borrowers must pass credit check
• 2% pre-payment fee

Home Loan II - 60-80% LTV

• Only available as additional loan to Home Loan I
• Fixed interest of 5.40% throughout loan term
• Loan term of up to 25 years
• Inflation-indexed
• Bank has second lien on property after Home Loan I
• Borrowing fees 1%
• Borrowers must pass credit check
• No pre-payment fee