New loans
Here you can find all the information about new loans from Gildi, whether it is for the purchase of property or for refinancing.
Everything you need to know about:
- Gildi provides indexed loans with fixed interest rates for real estate purchases and lends up to 70% of the property’s purchase price the property. Base loans are granted for up to 60% of the purchase price, with additional loans available for the portion between 60% and 70%.
- A credit assessment will only be available after a purchase offer has been approved and a loan application has been submitted.
- The maximum loan amount is ISK 75,000,000, combined with the loan amount from a superior lien. Loans can not exceed 100% of the fire insurance assessment plus the lot evaluation.
- Gildi issues loans in a continuous order, beginning with the first mortgage. An exception can be made from the claim above for a first priority lien and a continuous order of liens if the loan amount from other lenders is less than 20% of the purchase price.
- There can not be more than two buyers, as loans are only granted to individuals or cohabiting partners.
- A copy of the signed purchase offer, a sales summary for the property being sold, a payment plan from the Social Insurance Administration (TR) (if applicable), and a tax assessment notice (if applicable) must be included with the loan application.
- If you are buying a new building and there is no fire insurance assessment for the property, you must send a copy of the construction insurance for the property.
- You can refinance for up to 70% of the property value. Basic loans, for up to 60% of the property value, and additional loans between 60%-70% can be granted.
- The maximum loan amount is ISK 75,000,000 combined with the loan amount on the previous mortage. Loans do not exceed 100% of the fire insurance assessment plus the lot evaluation.
- Gildi issues loans in a continuous order, beginning with the first mortgage. An exception can be made from the claim above for first priority lien and a continuous order of liens if the loan amount from other lenders is less than 20% of the property’s value.
- If you are refinancing a loan from another lender, you must always go through a payment ability evaluation, even if the payment burden of property loans is decreasing.
- A payment plan from the Social Insurance Administration (TR) (if applicable) and a tax assessment notice (if applicable) must be included with the loan application.
- Gildi pays off property loans from other credit institutions, but the fund cannot pay off other debts that are not connected to the property, such as short-term personal small loans or overdrafts.
- If you intend to increase an existing loan or change the interest rate type, you need to apply for refinancing.
- Refinancing is not required if you want to change the period of the loan or the repayment type of the loan. This can be changed by changing the terms of the loan.
- The pension fund performs a credit assessment and evaluates the applicant's credit rating.
- A credit assessment can only be initiated once a loan application has been created.
- An exception to the credit assessment may apply if a loan from the pension fund is being refinanced with a new loan, provided the new loan amount does not exceed the outstanding balance of the original loan plus any associated borrowing costs.
- The evaluation is based on regular 12-month income according to the withholding tax record from the Directorate of Internal Revenue.
- Rental income is not taken into account in the payment ability evaluation.
- A spouse may not be included in the payment ability evaluation if they are not the registered owner of the property.
- The Central Bank of Iceland has set rules on the maximum payment burden for housing loans. The rules state that the payment burden of housing loans can be a maximum of 35% of disposable income, except in the case of first-time buyers, in which case it can be a maximum of 40%.
- The criteria for calculating the maximum payment burden according to the Central Bank's rules are equal payments. For non-indexed loans, a loan term of 40 years and contractual interest rates are assumed, but with a minimum interest rate of 5.5%. For indexed loans, a loan term of 25 years and contractual interest rates are assumed, but with a minimum interest rate of 3%, even if the payment structure and loan term of the loan may differ.
The following applies to property loans at Gildi:
- Loans are only granted against residential property intended as the borrower's legal residence.
- Loans are only granted for property that is fully owned by the borrower (individual) or jointly owned with a spouse (married or in a registered cohabitation).
- If there are two applicants, they must be married or in a registered cohabitation to be able to apply for a joint loan from the fund, both parties must be owners of the residential property and must go through the credit assessment together.
- It is not permitted to apply for a loan with a parent, sibling, or third party.
- If the residential property is solely owned by an individual, the credit assessment must only be based on their income, assets, and debts.
- Loans are not granted against collateral.
- Loans are not granted against a mortgage in vacation homes