Mortgages or property loans for people with income in foreign currency are designed for customers who wish to take a loan but need to use foreign currency to pass the credit assessment or for people who are resident abroad.
The loan repayments must be debited from a deposit account denominated in Icelandic krónur. It cannot be repaid in foreign currency. The customer must arrange to transfer funds into an account in Icelandic krónur to repay the loan.
Types of loan available are non‑indexed loans with fixed interest rates for 3 years or non-indexed loans with variable interest rates.
Before getting started, it's good to assess your situation by going through a credit assessment. If you're interested in learning more about this, you can send us a message at ibudalan@arionbanki.is or book an appointment with an advisor.
Loan-to-value may never exceed 70% of the market value of the property when buying and the real estate valuation when refinancing
According to rules from the Central Bank of Iceland, the payment‑burden ratio—which is the share of income taken up by housing loans—may not exceed 35%, or 40% for first‑time homebuyers
The loan must always be secured with a first lien
Loan period: 5-40 years
The minimum loan amount is ISK 1,000,000 for each loan
The mortgaged property must be in Iceland
If the borrower does not intend to live in the property, this will affect the interest on the loan
It is permitted to grant loans to persons with a foreign domicile but certain countries require further checks
The borrower must be able to pass a credit assessment that accounts for a potential 40% increase in the mortgage payment burden (regular loan repayment).
According to the Central Bank of Iceland's regulations, the payment burden ratio, which is the proportion of income allocated to mortgage payments, must not exceed 35% or 40% for first-time buyers.
Additional surplus requirement in credit assessment:
If the total mortgage application exceeds ISK 70,000,000, the credit assessment must show a surplus of ISK 10,000 for each million above ISK 70,000,000.
Example: For an ISK 80,000,000 mortgage, the credit assessment must show a surplus of ISK 100,000.
