The Central Bank of Iceland conducted a survey of market agents’ expectations over the period from 3-5 November. A total of 38 agents in the bond market, including banks, pension funds, mutual and investment funds, securities brokers, licensed asset management firms, and insurance firms were invited to participate. Responses were received from 30 market participants, giving a response ratio of 79%.

For some time, the Central Bank of Iceland has been examining the possibility of calculating and publishing interest rates based on Icelandic Treasury bond yields. On the basis of this work, the Bank has now decided to begin publishing constant maturity rates, beginning today. From now on, the Bank will publish these rates by 11:00 hrs. each business day.

The Financial Stability Committee (FSN) of the Central Bank of Iceland decided at an extraordinary meeting held today, 31 October 2025, to amend the Rules on Maximum Debt Service-to-Income Ratios for Mortgage Loans to Consumers, no. 216/2024, and the Rules on Maximum Loan-to-Value Ratios for Mortgage Loans to Consumers, no. 217/2024.

Uncertainty has developed in the mortgage lending market following the decision handed down by the Supreme Court on 14 October 2025 in Case no. 55/2024. Lenders are now assessing the impact of this decision and forthcoming judgments in comparable cases. They have already suspended issuance of certain types of mortgage loans due to uncertainty about loan terms and conditions. As a result, the supply of credit has been reduced, at least temporarily, particularly the supply of loans with a relatively lighter debt service burden. The loan options that have been introduced to replace the suspended loan types feature poorer interest rate terms and tighter borrowing requirements. The position of first-time buyers and lower-income buyers appears to have worsened especially.