Category: Reduced principal

The government's 110% solution

The aim of the government's 110% solution is to cancel encumbrances in excess of 110% mortgaging of borrowers' property. Creditors with mortgage rights in excess of 110% of the property's value cancel their claim. Cancellation of debt under the 110% solution is based on the status of mortgages on 1 January 2011. In the case of exchange rate linked loans, cancellation is based on the principal of the loan following recalculation in accordance with court rulings.

Further information on government’s 110% solution

Principal of foreign currency loans lowered

Individuals can choose to lower the principal of exchange rate indexed and foreign currency loans by 25% provided the loans are converted to non-indexed or indexed ISK-denominated loans. This solution is valid until and including 31 March 2011.

Additional details on lowering loan principals