Mortgage Loans

Fund members are entitled to a loan from the fund if they have paid pension contributions for at least the past 6 months or have a three year continuous pension contribution history with Birta Pension Fund (retirement pension). Fund members can receive favourable mortgage loans if they fulfil the terms and conditions listed in Birta’s credit rules.

The borrower can choose between two types of indexed mortgage loans with Birta Pension Fund.

Loans are only granted against a mortgage on residential property owned by the borrower in Iceland. The maximum mortgage loan that Birta can provide cannot exceed 65% of the property valuation, if other conditions set in the fund’s credit rules are fulfilled. If the borrower is purchasing a real estate the purchase price is used for the calculation of the maximum amount of loan the fund can grant. Fund members purchasing their first property can be granted additional mortgage loan from 75% of the purchase price.

Fund members who apply for a mortgage loan with Birta must meet at least one of the following conditions:

• Paid contributions to the fund based on a collective agreement or compulsory membership to the Cooperative Pension Fund (Samvinnulífeyrissjóður).
• Have paid contributions to the retirement fund for the past six months or have a three year continuous pension contribution history in the fund.
• Fund members that have retired and fulfilled one of these conditions have the same right, given that other conditions of the credit rules are met.

Fund members who pay into a private pension savings fund can allocate payments to their mortgage loan. Such allocation must be for a property used by the applicant him or herself. Such payments are exempt from tax.

Fund members can use their private pension savings to purchase their first property as they can use their savings as a down payments. Fund members can also use these savings to allocate monthly payments into their mortgage loan and lowering future payment’s burden.

Each applicant can use up to ISK 500,000 on an annual basis.

Private pension savings can be utilised to buy a first property over a continuous 10-year period.