Hagsmunasamtök Heimilanna

The Homes Association - Iceland
THE INCREDIBLE LOAN MACHINE
A Model of Icelandic Consumer Loan Repayment Structures

LOAN CRITERIA
Loan to value
Loan principal
Stamp duty
Borrowing fee
Paperwork cost
Cash disbursment
Borrowing date
First payment
Loan term
Instalments
Invoice fee

80% 25.000.000
ISK 20.000.000
1,5%
300.000
1,0%
200.000
ISK
2.800
ISK 19.497.200
01/04/2013
5/1/2013 01/05/2013
years
40
#
480
ISK
120

CPI-INDEXATION
Fixed interest rate indexed
4,10%
Fixed rate term
years
40
Base CPI
points
409,9
Inflation forecast
pcnt.
4,83%
CBI inflation target rate
2,50%
Historical inflation average
5,84%
Current 12m inflation rate
4,83%
Wage link option begin
01/06/2001
Wage link option end
01/05/2053
Wage forecast
7,27%
5,84%
NOMINAL INTEREST
Prevailing rate
4,10% 01/04/2013
Fixed interest rate nominal
4,10%
Fixed rate term
years
40
Interest option
4,10%
4,10%
Interest option
begin
01/04/2013
Interest option
end
01/05/2053
REFINANCING MODEL
Refinancing rate

years

Total repayment
Repayment ratio
Total credit cost
Total cost ratio
Annual Percentage Rate
Remainder

8

Loan type:
..........
kr.
..........
%
..........
kr.
..........
%
APRC
%
kr.

Indexed annuitet
93.663.478
468,32%
74.166.278
380,39%
8,43%
80.866.833

Indexed proportional *
83.853.004
419,27%
64.355.804
330,08%
8,86%
43.303.833

Nominal annuitet **
33.839.184
169,20%
14.341.984
73,56%
3,43%
12.238.384

* Proportional = payments proportional to remaining principal, plus interest
** Nominal = nominal amounts, excluding indexation cost components (significant part of total cost)
-- Note: before 2013, lenders have in most cases omitted indexation when providing loan price information

Nominal proportional
33.373.864
166,87%
13.876.664
71,17%
3,84%
6.553.568