Who are equity loan for ?

Equity loans are a resource that helps those who need help entering the real estate market. It is for first time buyers and those who have not owned a property for the past five years and  are below a certain income threshold. Equity loans helps individuals/couples/cohabitants build up equity and get into their own housing.

 Equity loans are for those who can pay off a mortgage loan  and pass a credit assessment but do not have a down payment without assistance.

In addition, installments on a real estate loan may not exceed 40% of salary after tax.

 It is required that the borrower/borrowers have a legal domicile in a residential property that was purchased with equity loans, and it is not allowed to rent it out without the approval of Húsnæðis- og mannvirkjastofnun.

There is no interest or installments on a equity loan, but the borrower repays the loan when he sells the property or at the end of the loan period. The equity loan is granted for 10 years, but the loan period may be extended by five years at a time, up to a maximum of 25 years in total. The equity loan follows the property's price change and increases and decreases accordingly.