Choos­ing be­tween rent­ing and buy­ing

For first‑time homebuyers, the following rules apply

• A minimum deposit of 15% of the purchase price

• A maximum loan of 85% of the purchase price

To supplement your personal savings, you may apply to use part of your supplementary pension savings tax-free towards the deposit on the first property you purchase. This is, of course, subject to the regulations in effect at the time this article is written, and these rules may change in the future.

The amount of the loan you can apply for depends primarily on your repayment capacity and the rules set by the Central Bank of Iceland regarding both the maximum percentage of the purchase price that can be financed and the maximum percentage of monthly disposable income that can be allocated to mortgage payments. According to the rules in effect when this article was written, the mortgage payment burden may not exceed 40% of the household's after-tax income when purchasing a first property. Your repayment capacity is assessed through a credit assessment that can be easily completed online on Arion Bank's website.

Whatever steps you take towards moving out of your parental home, we strongly recommend maintaining a clear overview of your finances at all times. Our advisers are always available to discuss your plans or provide guidance if needed.