Mortgages on European Terms to Be Offered in Iceland Skip to content

Mortgages on European Terms to Be Offered in Iceland

By Iceland Review

Icelandic lending institution Sparnadur ehf. in cooperation with German financial company VKB plans to offer mortgages on European terms in Iceland, meaning the interest rates will not be higher than elsewhere in Europe.

Chairman of Sparnadur’s board Ingólfur Ingólfsson told 24 Stundir the service will be offered to Icelanders “in the near future.” Sparnadur and VKB plan to establish a company in Iceland under the brand of Bayern-Líf.

“Mortgages will possibly be offered with five percent interest rates without indexation instead of six to seven percent indexed interest rates as is currently the practice in Iceland,” Ingólfsson said.

“Here you pay up to seven percent interest rates in addition to the indexation which fluctuates with the inflation,” Ingólfsson explained. “The loan taker is thus paying up to 12 percent interest rates of his or her loan.”

“The goal is to have a euro bank in Iceland which can compete with the Icelandic banks and change the terms of the loan market here to what the market is like in other European countries,” Ingólfsson concluded.

Click here to read more about the housing credit market in Iceland.

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