Moving Out: A Major Life Step

Moving away from home marks a significant step in most of our lives. We say goodbye to the protected environment of our parents' home and suddenly wake up in a place where no one reminds us to put dirty socks in the washing machine, fill the refrigerator, or salt the steps when it freezes overnight. We become responsible for all household management ourselves – including finances.

Create a household budget - it pays off many times over

One of the first things we recommend when people start living on their own is to create a simple overview of household finances. This doesn't need to be complicated: Simply compare your fixed monthly expenses with your income. The following guidelines might be useful:

• 50% fixed costs; housing, loan payments, food, transportation

• 30% variable costs; entertainment, clothes and shoes, restaurants, fitness, hobbies

• 20% savings; investments or savings account

A budget of this kind is not set in stone, of course. However, it's sensible to try to stick to some guidelines.

The Big Question: Rent or Buy?

Your financial situation and financial goals will determine whether it's better to rent or buy property. Be sure to explore both options before making a decision. If you decide to purchase property, it's important to keep in mind that according to current Central Bank of Iceland regulations, the following applies to first-time property buyers:

• Down payment is at minimum 15% of the purchase price

• Housing loans cover a maximum of 85% of the purchase price

• Loan payments can be at maximum 40% of monthly disposable income*

In addition to your own savings, you can apply to use part of your supplementary pension savings tax-free toward the down payment on your first property purchase.

*Monthly disposable income is the income remaining after taxes and fees have been deducted from your salary.

Don't hesitate to contact us

We know that buying your first property is a huge decision. You are always welcome to contact our advisors. We'll help you find the best solution.