The Central Bank of Iceland has published its latest quarterly lending survey of the four commercial banks, showing broadly stable household and corporate credit conditions. Mortgage supply increased marginally and lending rules eased slightly over the previous three months, while banks expect mortgage supply to rise slightly and other credit supply to remain broadly unchanged over the next six months. Banks expect interest rates on indexed household loans and non-indexed mortgages to rise, primarily because of expectations of a higher key interest rate and increased funding costs. Króna-denominated corporate lending rates are also projected to increase, particularly for non-indexed loans, while rates and interest premia on foreign currency loans to large companies are expected to decline as funding costs fall. Corporate credit demand is expected to remain stable for large companies but shrink marginally among smaller firms.
2026-08-26Central Bank of Iceland
Central Bank of Iceland survey finds broadly stable credit supply, banks expect higher króna lending rates
The Central Bank of Iceland’s quarterly lending survey indicates broadly stable credit supply, with a marginal increase in mortgage availability. Banks expect household and corporate króna lending rates to rise because of a higher key interest rate and funding costs, while foreign currency corporate loan rates are projected to decline.