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Apartments for Sale: Five Percent Down

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Apartments for Sale: Five Percent Down

Kársnes in Kópavogur.

Kársnes point in Kópavogur. Photo: map.is

An Icelandic construction company is offering ten apartments for sale, where the buyer will only need to provide a five percent down payment. “There’s no doubt that if this goes well, we’ll keep doing it,” stated Sverrir Einar Eiríksson, who represents the construction company Þak (‘Roof’), RÚV reports.

Þak offers to lend buyers 15 percent of the purchasing price, in addition to the 80 percent mortgage loan provided by banks or by the Housing Financing Fund (íbúðalánasjóður).

Much has been talked about how difficult it is for young people to purchase their first home. Real estate prices have rapidly gone up in recent years, and many find it hard to save up for a down payment.

Þak owns a ten-unit apartment building on Kársnesbraut in Kópavogur, which used to be rented out. The units are 29-47 m2 (312-506 sq ft) studio apartments, priced at ISK 15.9-23.9 million (USD 140,000-210,000, EUR 130,000-196,000). Sverrir describes them as ideal for young people.

The 15 percent loan Þak offers for the most expensive apartments is a seven-year, non-indexed loan with a 9.8 percent interest rate, amounting to over ISK 3.5 million (USD 31,000,EUR 29,000). That’s the same kind of deal as is offered on car loans, stated Sverrir.

He noted that other contractors are following this experiment with great interest, considering giving this a try if all goes well.

“Hopefully, this is the first step toward what’s here to stay,” Sverrir told Vísir.

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