Everything you need to know

First-time buyers can withdraw pension savings tax-free to finance their first property purchase. This is one of the most important tools you have.

Key rules

500.000ISK/year

Maximum withdrawal per person per year

5.000.000total

Maximum total withdrawal per person

10years

Maximum withdrawal period

30%ownership

Minimum registered ownership

Three ways to withdraw

1. AOption A

   Lump sum

   Withdraw accumulated pension savings as a lump sum for down payment. You choose how many years back you want to withdraw.

2. BOption B

   Against loan payments

   Pay your contributions into the mortgage every month. On an indexed loan they go to the principal. On a non-indexed loan they can also go toward instalments: all of it for the first 12 months, then 10 percentage points less each year.

3. COption C

   Combination

   Use part of accumulated savings for down payment and direct the rest toward loan payments.

No law sets how long a purchase takes; it depends on the offer and the purchase agreement. It commonly takes about 4–5 months from an accepted offer to the deed.

1. 011–4 weeks

   Preparation

   • Calculate what you can afford using our calculator
   • Check your pension savings
   • Get a credit assessment from a bank or pension fund
   • Start searching on mbl.is/fasteignir or fasteignir.is
2. 022–6 weeks

   Viewing and Offer

   • Attend open houses and scheduled viewings
   • Use our checklist to record observations
   • Make a written offer through the real estate agent
   • Note: The offer binds you as soon as the seller receives it, until the acceptance deadline. Once the seller accepts it, there is a binding contract.
3. 034–6 weeks

   Purchase agreement

   • Purchase agreement signed and registered (stamp duty paid)
   • Payment at signing
   • Apply for séreign once the agreement is registered
   • Finalize loan with bank/pension fund
4. 043–4 months

   Handover and deed

   • Loan disbursed
   • Property handover and key exchange
   • Final payment and the deed, which is then registered
   • Congratulations!

In Iceland, there are two main types of mortgages: indexed and non-indexed. Which is better depends on circumstances, inflation outlook, and your preferences.

Limits for first-time buyers

HMS, Iceland's housing and planning agency, offers shared-equity loans that help first-time buyers, and people who haven't owned a home in the last five years, gather a down payment.

How does it work?

The loan carries no interest and no instalments. The repayment follows the home's value and is due when you sell, or at the latest after 10 years; the term can be extended 5 years at a time, up to 25 years.

Income limits (last 12 months)

Single

10.000.000 kr.

Married or cohabiting couple

15.000.000 kr.

Added for each child under 20

+2.254.000 kr.

Shared-equity loans are only for new builds approved by HMS. Property sites such as fasteignir.is and mbl.is let you filter for eligible homes.

A well-prepared inspection can save you millions. Here are the key things to check.

In addition to the purchase price, you need to budget for various costs.