Partial mortgage release
You can apply for a partial mortgage release if you wish to divide the property for which you received a loan from HMS. Then part of the property is freed from the mortgage while you keep the loan.
Example
You want to sell a lot or land that is part of a property.
You want to sell the basement of your house.
Conditions
Mortgage space after the changes or reduction of the mortgage, must be sufficient for the remainder of the loan.
The total recalculated amount of the remainder of the loan must not exceed 80% of the property’s market value.
Application
Before you apply, you must make a new joint ownership agreement (eignaskiptayfirlýsing) and hand in at the office of the local building inspector. In addition you need to apply and pay for the registration of a new property number in the HMS property register, for the property that is created in this process.
Additional documents
The application must include:
A statement of the balance of other loans that precede the HMS loan on the property.
A copy of the lot’s founding document, description of the share of the property or its property number.
A HMS consultant will contact you by email and request more information if needed.
Application for a partial mortgage release approved
You will receive an email when the application for a partial mortgage release has been approved.
Once the documents are ready, you can collect them during opening hours at the HMS office at Borgartún 21. You can also request to have the documents sent by post if you live outside the capital region.
When the documents have been registered at the District Commissioner’s office (Sýslumaður) you return them to HMS.
You can sell the part of the property that was released from the mortgage.
Application for a partial mortgage release declined
If your application for a partial release of mortgage security is rejected, the decision will be sent to your digital mailbox on island.is. If new documents or information become available, you may request that your case be reopened.
If you believe the decision is incorrect, you may appeal it to the Welfare Appeals Committee (Úrskurðarnefnd velferðarmála).
Service provider
Housing, construction and planning authority