Here you can find all the information about new loans from Gildi, whether it is for the purchase of property or for refinancing.
Yes, it is possible to make additional payments on a loan.
If the person in question has online banking with Íslandsbanki, it is done with a command in the online banking, but alternatively, it is possible to transfer to account 0526-22-1, ID No. 421289-2639, and have the loan number in the reference (Íslandsbanki is the collection agency).
If a loan is being paid off, Íslandsbanki must be contacted with the prepayment value for the day the loan is paid off.
There is no prepayment fee on loans from Gildi, and they can be paid off at any time.
The Icelandic Central Bank has set rules on the maximum debt service-to-income ratio (DSTI) in proportion to disposable income. The maximum DSTI for housing loans is 35% of monthly disposable income. The maximum goes up to 40% for first-time buyers and up to 37,5% when one of the two buyers has previously owned a property.
Debt service on non-indexed mortgage loans is calculated based on a minimum interest rate of 5.5% and a maximum loan term of 40 years, while debt service on indexed mortgages is calculated based on a minimum interest rate of 3% and a maximum loan term of 25 years.
You have to pass both a payment ability evaluation and a credit rating.
In order to get a loan, you have to provide a mortgage on a residential property in Iceland. The mortgage rate must never be higher than 70% of the appraised market value of the relevant property. The estimated market value is based on a recent purchase agreement or property assessment of the current year.
Loans are divided into basic loans and additional loans, depending on the mortgage rate. A basic loan has a mortgage rate of up to 60%, and an additional loan has a mortgage rate of 60–70%.
The mortgage may not exceed 100% of the property’s fire insurance appraisal plus the plot assessment.
As an example, the maximum loan for a property with a value of ISK 30 million is ISK 22.5 million as long as the conditions for a fire insurance appraisal are met. An amount greater than ISK 75 million is not lent (including additional loans). More information can be found in loan rules.
Gildi’s Board of Directors decides on changes to the interest rates of mutual fund loans. In those decisions, interest rates on the market for similar loans and the fund’s risk assessment are mainly considered, but other factors are also taken into consideration. They vary depending on the type of loan, but they can include the Central Bank of Iceland’s policy rates, deposit rates as well as historical and expected inflation. More information can be found in Gildi’s loan rules.
It generally takes 2–3 weeks to process a loan application.
The borrower himself has to get the bonds publicly registered; how long it takes varies depending on the District Commissioner’s Office.
The bonds themselves must be signed with two witnesses and submitted for official registration and collected once the registration has been completed. A bond will not be paid out until the registered document has been received by the fund.
If the instalments or interest are not paid on the due date, late payment interest will be paid in addition to collection costs according to the tariff of a commercial bank or legal firm at each time.
If the contract is not fulfilled, Gildi may move up the entire debt to the due date without notice. As a last resort, the borrower’s home (mortgaged property) may be foreclosed.