Landsbankinn announces interest rate increase for deposits and loans in Iceland

Landsbankinn has announced a rise in interest rates for both deposits and loans. From today, the variable interest rates for inflation-indexed residential mortgages will increase by 0.25%. These mortgages with equal payments will now only be available to first-time buyers.

The changes are effective immediately for new loans, while notifications regarding adjustments for existing loans will be sent to customers. The bank emphasized that the maximum loan term for new inflation-indexed residential mortgages remains 30 years, and for new non-inflation-indexed loans, it stays at 40 years. The maximum loan-to-value ratios for new residential loans will not change.

Alongside the interest rate changes, Landsbankinn is also modifying the availability of inflation-indexed residential mortgages. From now on, these loans with equal payments will exclusively cater to first-time homebuyers. However, there will be no changes to the availability of inflation-indexed loans with regular repayments.

Additionally, fixed interest rates on non-inflation-indexed loans for car and equipment financing will decrease by 0.20 percentage points. Interest rates on foreign currency accounts will be adjusted according to the current rates of the respective currencies.

These shifts come amid broader economic developments, reflecting ongoing adjustments within the Icelandic banking sector in response to market conditions.