Mortgage loans

LSR offers fund members loans against a mortgage on a private property in Iceland, owned by the borrower. The loan can be up to 70% of the property value, on certain conditions, and subject to credit assessment and credit rating.

HusaThe loans can have a maturity of 3 to 40 years, allowing you to set repayment amounts to a level that suits your repayment ability.LSR does not charge any prepayment charges, so if you want to make additional payments there is no additional cost.

Indexed mortgage loans

LSR offers two types of inflation-indexed loans; a fixed-rate loan, which we currently offer at a rate of 3.0%, and a variable-rate loan, currently available at 2.3%. The former is fixed for the total duration of the loan period, offering you long-term stability, while the rates of the latter are fixed for 36 months after which it is adjusted to the current rate at the time and fixed for the next 36 months. Both types of loans are available with either equal instalments repaid on the capital (annuity) or equal total payments (amortised).

Non-indexed mortgage loans

LSR offers non-indexed loans at a rate of 4.5%. The rate is fixed for 36 months, after which it is adjusted to the current rate at the time and fixed for the next 36 months. Unlike indexed loans, where the capital changes in line with inflation, the capital of non-indexed loans is not affected by inflation. Non-indexed loans are available with either equal instalments repaid on the capital (annuity) or equal total payments (amortised).

What is the difference?

Non-indexed loans initially have higher payments, but the principal is paid off at a quicker rate. For indexed loans, payments are initially lower because part of the financing costs are added to the principal but paid in full later during the repayment period.

Similarly, loans with equal instalments have higher payments initially since the debt service is greatest at the beginning, whereas payments for loans with equal total payments are initially lower, and the principal decreases more slowly. Note also that payments for indexed loans will change in line with inflation.

A hybrid mortgage

At LSR you can get a mix of the types of loans available in order to enjoy the benefits of both. For example, you can get an indexed loan for half the total amount of loan you need, and a non-indexed loan for the other half.


Loan Conditions

Active members of LSR or those who have made contributions to the pension fund in the last 5 years are eligible for a loan.

Loans are granted against a mortgage on a private property in Iceland, owned by the borrower.

The outstanding balance on any existing mortgages, plus the loan applied for at LSR, may not exceed 65% of the value of the property The loan to value ratio can be increased to 70%, however, if mortgages with other institutions than LSR amount to 10% or less of the value of the property.

All owners/buyers of the property must be co-borrowers of the loan and will be included in the credit assessment.

The maximum total loan amount at LSR is ISK 50,000,000, with a minimum amount of ISK 1,000,000.

Need further assistance? Feel free to contact us at lan@lsr.is or by phone at 510 6100 to get more information about our loan options.