Banking in Iceland

Living in Europe | Banking | Iceland

If you have an Icelandic employer or if you are living in Iceland, you will definitely need a bank account for your day-to-day transactions, especially if your stay exceeds six months. Access to an Icelandic bank account will enable you to receive salary payments and handle your finances. 

For convenience most employees choose to have their paychecks directly deposited. Be a wise consumer and shop around. Some banks offer better interest rates than others on your savings. Ask about the different services offered by banks before deciding which one offers an account that is best suited to your needs, offers the best rate of return and has the lowest service charges.

Your host institution could provide good advice  regarding which bank could provide the best services for you.

There are a number of banks to choose from. The Banks have different policies and charectaristics. Even though we are in no way affiliated to any banks, here's a list of a few banks with information in English:


Arion banki


To open a bank account you need an Icelandic ID number and an address in Iceland. Usually you have to apply for an identity number or ID-number at the Icelandic National Registry (Þjóðskrá).

You will have to show up personally to sign the account agreement. Bring your passport, a passport photo and your Icelandic national identity number. For some countries additional documentation may be required. You may be asked if you plan to transfer money out of Iceland.

Most banks attach a VISA or Mastercard debit card to your bank account. You will receive the VISA card and your PIN code separately by post. To apply for a credit card you may have to document employment and salary.

When you move from Iceland you should return your bank card. Usually you have to pay an annual fee to keep the card even if the account is 0,-. You can still keep your bank account and internet bank.

Registers Iceland (Þjóðskrá Íslands)
Borgartúni 21 150 Reykjavík
Telephone: (+354) 515 530

  • All banks offer online banking which allows you to transfer money and pay bills without paying service fees.
  • Giros can be used as an alternative, but you will have to pay a service fee.

Online banking is the easiest and cheapest way to transfer money to a foreign bank account. However, you may also use money transfer companies, the post office, or banks. Prices vary. 


Most people finance the purchase of real-estate property and housing construction with mortgages, and they need to investigate what kinds of terms are available.

Borrowing option

  • Mortgages are offered by various credit institutions:

Housing Financing Fund,

Commercial banks and saving banks,

Pension funds.

  • Most credit institutions require that a payment ability evaluation accompany loan applications. The payment ability evaluation is a calculation of the borrower's ability to pay and his or her borrowing needs; in other words, an assessment of how expensive a property the person in question will be able to buy based on the value of his or her assets, income and expenses.
  • Borrowers with the Housing Financing Fund will be able to prepare their own evaluation of their ability to pay on the Internet, or they can receive assistance with this over the telephone or at the Fund's facilities. Other lenders usually prepare the evaluation of payment ability for their customers.
  • The Housing Financing Fund offers loans to individuals to buy, construct or make improvements on their own accommodation. The residents of Iceland have the same right to obtain the Fund's housing loans, regardless of where in Iceland they live.
  • The Housing Complaints Committee decides on disputes regarding the decisions of the Housing Financing Fund.

About housing loans

  • All house-purchasing loans are mortgages, which means that they are secured with a mortgage in the property to be purchased or in other real-estate properties.
  • When a decision is being made as to how large a mortgage will be granted for a house purchase, the reference points are usually the borrower's payment ability and the price of the property. Lenders will also view the assessment of the property to be purchased or mortgaged.
  • The payment load of the loan, meaning the value of installments, is determined by the interest on the mortgage and the repayment term.
  • If payment difficulties arise it is possible to seek advice and remedial action from

Housing Financing Fund,

credit institutions,

The social services of local communities, and

The Domestic Dept Advisory Service


  • Get information on different borrowing options and interest rates from the Housing Financing Fund, banks and other credit institutions.
  • It is possible to prepare an evaluation of payment ability through the Housing Financing Fund website, if you want to check your purchasing power.
  • Seek remedial action from the creditor or from other advisors as soon as possible if any payment difficulties arise.

Links of interest

The Housing Financing Fund

Housing, Ministry of Welfare

The Debtors' Ombudsman

Laws and regulations

Legislation, Ministry of Welfare

(Info taken from