Home is where the heart is
We can finance up to 80% of your new home, or up to 85% if you are a first-time buyer.
We can finance up to 80% of your new home, or up to 85% if you are a first-time buyer.
Non-indexed loans have higher monthly repayments and build equity faster. In comparison, inflation-indexed loans have lower monthly repayments but slower equity build-up.
You can also choose a mixed loan, which combines the benefits of both options.
Inflation-indexed loans are linked to the consumer price index and therefore change when the price level increases or decreases.
Indexed loans have fixed interest rates for 5-year periods. At the end of each 5-year period, the bank has the authority to review the interest rates and fix them again for the next 5 years. During the last 90 days of each fixed-rate period, the loan does not carry a prepayment fee.
Non-indexed loans are not linked to the consumer price index and therefore do not increase with inflation.
Non-indexed housing loans have fixed interest rates for 3 years or variable interest rates for the entire loan term. The loan term can be up to 40 years. Customers can request refinancing in the third year of the fixed-rate period and throughout the loan term without prepayment penalties, allowing them to choose from loan options available at that time. If the loan is not refinanced before the end of the fixed-rate period, it will switch to the variable interest rates available at that time plus a fixed interest premium specified in the loan terms.
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Suitable for those who want to take advantage of favorable pension fund loans but need additional funding to purchase a new property or refinance existing housing.
We offer a simple and fast credit assessment. The process is digital, and it only takes a few minutes to calculate your affordability. We collect information such as your income, assets, and liabilities.
The lending environment may now be more favourable than when you first took out the loan, which can lead to lower interest rates and lower monthly repayments.
We provide comprehensive financing that supports you through every stage of your project, from buying the land to finishing the construction.
Do you earn income in a foreign currency? We offer mortgages for people who either live abroad or earn income in a foreign currency and need to pass a credit assessment in Iceland.
We offer customers 100% discount on loan origination fees for residential mortgages when purchasing environmentally certified housing.
Confirmation must be provided that the property has been certified by one of the following entities:
Nordic Swan Ecolabel
BREEAM - Very Good
LEED Gold
You can apply for a real estate loan if you're buying an apartment that isn't approved for residential use, a recreational property, or a summer house. It may also be an option if your application or the property offered as security does not meet the requirements for a mortgage.
In some cases, it may help to apply for a temporary break from your mortgage payments.
When payments become difficult, taking early action and exploring available options could help you get back on track.
To make first-time home purchases easier, we lend up to 85% of the property's market value and also offer a 100% discount on the loan origination fee.
We offer new parents the option to reduce their payments by up to half while they're on parental leave.
With a payment moratorium on your loan, you can pay a fixed, reduced amount for 12 months instead of your standard monthly payment.
We want you to benefit from having your finances and insurance in the same place. As a result, you'll get better terms if you're with both Arion and Vörður. All you need to do is download the Arion app, click on More and then My Insurance. If you like the offer, you can complete the purchase with a single click. It's that simple.
Life insurance available for those taking out new housing loans with Arion. The insurance provides families with peace of mind by ensuring payment of loan installments and interest for a specified period.
Choosing the right mortgage is a major decision that affects your household finances for many years. Therefore, it's important to understand how the choice of loan term and type can change both the payment burden and total cost. Whether the loan is indexed or non-indexed, and how long the loan term is, can have significant effects on payment burden and equity building.
After checking your payment capacity and securing a down payment, it's time to find your dream property. This process can take varying amounts of time, but it's important to choose carefully and find a property that has most of the features you're looking for.
Most people have very clear ideas about what kind of apartment they're looking for and what requirements it needs to meet, but it's good to keep in mind that you may not find an apartment that fulfills all your wishes. When buying your first property, you often need to prioritize features and choose the property that checks the most boxes if you can't find one at the right price that meets all your criteria.
When taking out a new loan, the repayment period can be crucial. The maximum loan term varies, but the longest loans are for real estate purchases, which can extend up to 40 years.
It is difficult to determine whether renting or buying is right for you, and this is mainly guided by your financial situation and financial goals. You should calculate both options thoroughly before making a decision. If you are considering purchasing property, there are several important factors you should familiarize yourself with and be clear about before you begin the process.
Non-indexed loans are available for up to 40 years. Indexed loans are available for up to 30 years.
Non-indexed variable interest rates are available for the duration of the loan, or non-indexed fixed interest rates for three years, which then convert to non-indexed variable interest rates after the fixed-rate period ends.
Indexed loans are offered at fixed interest rates for five years, after which the loans receive the same interest rates as comparable new loans.
Collateral is always in residential property.
Mortgage loans generally come with either equal payments or equal principal payments.
You can refinance a loan with equal principal payments and choose equal payments instead. In that case, affordability assessment is taken into account, just as it is with standard mortgage refinancing.
What are equal payments?
Equal payments work by having you pay approximately the same total amount each month throughout the loan term.
The payment consists of:
Principal payment
Interest
Inflation adjustment (if the loan is index-linked)
Initially, the payment burden is generally lower than that of a loan with equal principal payments, but the principal decreases more slowly.
What are equal principal payments?
Equal principal payments work by having you pay the same amount off the principal each month throughout the loan term.
The payment consists of:
Principal payment
Interest
Inflation adjustment (if the loan is index-linked)
Initially, the payment burden is generally higher than that of a loan with equal payments. However, the principal decreases more quickly, and the payment burden decreases accordingly.
There is no prepayment fee on loans with variable interest rates.
Loans with fixed interest rates may be subject to a prepayment fee.
No prepayment fee applies in the following cases:
Interest rates on comparable fixed-rate mortgages offered by the bank at the time are equal to or higher than the rate on the loan being prepaid.
During the last 90 days of each fixed‑interest period on indexed loans, the loan is not subject to a prepayment fee.
Prepayments amount to less than ISK 1,000,000 in each calendar year.
A prepayment fee is charged if:
The loan is prepaid during the fixed-rate period, and interest rates on comparable fixed-rate loans offered by the bank at the time are lower than the rate on the loan being prepaid.
The prepayment fee is calculated based on the following principles:
The fee may not exceed 0.2% of the prepaid amount for each full year remaining of the fixed-rate period, and may never exceed the bank’s actual cost resulting from the prepayment or 1% of the prepaid amount.
The fee is based on objective criteria, reflecting the costs incurred by the bank that are directly related to the early repayment of the loan before the agreed maturity date.
Further information on prepayment fees for loans that have already been granted can be found in Arion Bank’s Tariff Schedule, as different rules may apply depending on when the loan was issued.
Other fees are charged in accordance with Arion Bank’s tariff schedule at any given time.
Mortgage lending can be split into two loans based on the property’s loan-to-value (LTV) ratio.
Grunnlán requires a first-ranking mortgage lien (1st priority security), and the maximum LTV is 70% of the property’s assessed value or market value (whichever is lower).
Mortgage II is secured with a second-ranking mortgage lien (2nd priority security), behind Grunnlán.
Purchase agreement: The maximum LTV is 80% based on the purchase agreement (85% for first-time buyers).
Refinancing: The maximum LTV is 80% based on the property’s assessed value.
If the loan amount exceeds ISK 50 million, the bank reserves the right to impose additional lending requirements.
The loan origination fee is charged in accordance with the bank’s fee schedule
The registration fee is charged in accordance with the District Commissioner’s fee schedule
Other fees related to the loan, such as affordability assessments and document preparation, are charged in accordance with the applicable fee schedule at any given time
No, but in some cases real estate loans are granted up to a certain loan-to-value ratio. Each loan application for unapproved apartments is evaluated individually.
No, lending is based on the property valuation and therefore there is no cost incurred for appraisal.
It is not possible to predict such things. Interest rates change and are influenced by numerous factors. Interest rates on variable rate loans can therefore either increase or decrease, while fixed rates remain unchanged. When interest rates rise, it is more economical to have fixed rates, but when interest rates fall, it is more advantageous to have variable rates.
The loans are exclusively intended for individuals who are purchasing or refinancing housing for their own use, not for rental purposes or for private limited companies or other business operators. It is a requirement to have legal residence in the property. There is no requirement for borrowers to be customers of the bank.
A residential mortgage can be used when purchasing residential property for personal use or for refinancing existing loans. In fact, the refinancing loan can be used however the borrower prefers, to finance repairs or renovations, pay off older less favorable loans, overdrafts, or other debts.
When an individual and a fund purchase a property together, which the individual intends to use for personal purposes, then indexed-linked housing loans with a maximum term of 25 years or non-indexed housing loans with a maximum term of 40 years are available.
When refinancing, a loan fee, credit assessment fee, document preparation fee, and registration fee are charged. It varies whether the lending institution requires a prepayment fee.
If obligations under the agreement are not met, the borrower will be required to pay penalty interest on overdue payments. The borrower will also be required to pay all costs that may arise due to default, e.g., for collection letters, lawsuits or other legal fees, attorney's fees, as well as other legal costs related to debt collection. Furthermore, default can result in the entire loan being accelerated and placed in legal collection, which may lead to the collateral being sold at a forced auction.