Arion Bank changes in­terest rates

The following changes to deposit and lending rates for consumers and companies will take effect on Thursday 26 March, with the exception that changes to non‑indexed residential mortgage rates fixed for three years take effect immediately.

Residential mortgages

• Non‑indexed variable mortgage rates increase by 0.25 percentage points to 9.19%

• Non‑indexed mortgage rates fixed for three years increase by 0.15 percentage points to 8.25%

• Indexed variable mortgage rates decrease by 0.10 percentage points to 4.49%

• Indexed mortgage rates fixed for three years decrease by 0.10 percentage points to 4.64%

Preferential rates

• Non‑indexed variable preferential rates for individuals and companies increase by 0.25 percentage points to 10.35%

• Indexed variable preferential rates for individuals decrease by 0.10 percentage points to 6.15%

• Indexed variable preferential rates for companies decrease by 0.10 percentage points to 6.35%

Car loans

• Preferential car loan rates increase by 0.25 percentage points to 10.75%

Overdraft interest

• Overdraft rates increase by 0.25 percentage points to 15.25%

Credit cards

• Instalment payment and revolving credit card interest rates increase by 0.25 percentage points to 15.25%

Deposits

• Interest rates on current accounts remain unchanged

• Interest rates on other non‑indexed accounts increase by up to 0.35 percentage points

• Interest rates on indexed accounts decrease by up to 0.10 percentage points

Changes to interest rates on loans subject to the Consumer Credit Act or the Act on Housing Loans to Consumers take effect in accordance with the loan terms and notifications of interest rate changes. The same applies to changes in deposit interest rates subject to the Payment Services Act.

Changes to Arion Bank’s lending rates reflect the Bank’s funding costs at any given time, as well as other factors, including credit risk. The Bank’s funding costs are partly influenced by the Central Bank of Iceland’s policy rates, but other funding sources also have a significant impact, such as customer deposits, market funding, foreign bond issuance, and capital instruments.

The increase of 0.25 percentage points in variable interest rates on non‑indexed loans is primarily due to higher funding costs for the Bank. In the case of indexed loans, variable interest rates are reduced by 0.10 percentage points, reflecting the Bank’s assessment of changes in short‑term real interest rates.