Purchase of a real estate property
Loans with a mortgage/collateral in Iceland are only applicable when the mortgage is in a residential property, owned by the applicant and must be in building stage 6 or 7, and assessment level 7 or 8, according to Registers Iceland (Þjóðskrá Íslands).
The maximum mortgage ratio is 75%, with an additional loan, when purchasing a real estate property. Loans are not granted to those with a mortgage in more than three properties.
What do I need to know?
- The maximum loan ratio is 75% of the purchase price of property.
- Ef Loan borrower is the owner of another real estate property that will not be sold, the maximum loan ratio is 75% of the purchase price of property.
- The loan amount can never exceed the combined fire insurance valuation and ground property. You can view all properties through www.skra.is
- Brú Pension Loans are only applicable for real estate properties.
- If you apply for 75% of purchase price, the base loan will cover 65% and the additional loan 10%, or the the percentage that amounts to 75%.
- You can apply for a base loan with indexed interest.
- You can apply for a base loan with equal payments or equal instalments.
- The maximum loan amount is 95,000,000 ISK.
- If you apply for a loan amount exceeding 50,000,000 ISK, Brú Pension Fund makes higher demands for payment capacity and the minimum credit rating of all applicants is B.
- At least one applicant must be a fund member of Brú Pension Fund.
- The additional loan is a fixed product with non-indexed interest, equal instalments and maximum period of 15 years.
- Maximum duration of base loan is 40 years if the mortgage is under 65% of property value but shortens to 35 years if the mortgage amount is higher.
- Applicants do not need to be joined.
- All applicants must be owners of the property mortgaged for the loan.
- Overview of retained earnings/net worth/equity needs to be submitted with the application (if not derived from other sold property). The overview must be from online banking of the applicant, and must include account owner, date, and amount on the account. A screenshot is not sufficient.
- Information on utilizing personal pension savings for payments of loan can be found on skatturinn.is and www.leidretting.is
Documents required
- Last year's tax return (skattframtal). Available at Skatturinn.is website – my pages – tax returns from past years (framtal síðustu ára)
- Income tax report for this year and last year (staðgreiðsla). Available at Skatturinn.is website – my pages – almennt
- If applicable: Payment plan from the Social Insurance Administration (Tryggingastofnun/TR) - Accessible on Tryggingastofnun website - my pages
- If applicable: Overview of child support payments (meðlag). Accessible at Meðlag.is.
- Purchase offer and sales overview.
- Overview of equity. The overview must be of the owner's bank account that proves the following: The owner of the bank account, date and the available amount. A screenshot is not valid.
- Copy of valid ID. For example a driving license or a passport.
- If, after receiving the loan, you still owe other mortgage loans with the mortgage in the same or other property, you must submit a copy of a payment slip.
- Any addinitoal applicants must submit their consent for data collection. The form is available on the application website or you can click the link here: 7.1.2. Data Collection Consent Form