Cost Of Living in Iceland 2024
Average monthly spending for singles, couples, students, and families in Iceland
Whether you're living in Iceland or planning to move there, it is very important to know the cost of living and the prices of things. Here we list the average spending for the four main population groups.
Average Monthly Expenditure630,000 ISK
per month$4,60049,000 ISK $350
$46,000 6.3M ISK
Single440,000 ISK
per month$3,200150,000 ISK $1,100
$21,000 2.9M ISK
Couple730,000 ISK
per month$5,300240,000 ISK $1,800
$28,000 3.9M ISK
Family970,000 ISK
per month$7,100340,000 ISK $2,500
$39,000 5.3M ISK
Student310,000 ISK
per month$2,300120,000 ISK $900
$4,100 560,000 ISK
The figures displayed here are inclusive of everything: housing, travel, groceries, healthcare, etc.
Singles
The average monthly expense for a single person living in Iceland is 440,000 ISK. Expenses can range from 150,000 ISK at the minimum level to 2.9M ISK at the highest end.
Couples
The average monthly spending of couples in Iceland is 730,000 ISK. Expenditure can range from 240,000 ISK to 3.9M ISK per month.
Families
The average cost of living for families in Iceland is 970,000 ISK per month. Families spend anywhere from 340,000 ISK to 5.3M ISK.
Students
The average monthly expenditure for students in Iceland is 310,000 ISK. Students spend from 120,000 ISK to 560,000 ISK per month.
Spending behavior can change drastically from one person to another. It is best to consider the minimum, average, and maximum spending together.
Prices and cost of goods and services in Iceland
Dining, food, and beverages costs
Large bottle of water
Fast food combo meal | 690 ISK | 1,400 ISK | 2,300 ISK |
Restaurant meal for one | 2,300 ISK | 3,400 ISK | 6,900 ISK |
Fine dining meal for one | 4,600 ISK | 6,900 ISK | 28,000 ISK |
Soda or Soft Drink
Cappuccino or latte | 570 ISK | 920 ISK | 1,400 ISK |
Grocery and market costs
Milk large bottle
Loaf of bread
12 eggs
Fresh whole chicken | 780 ISK | 1,000 ISK | 1,400 ISK |
Beef 1 kg or 1 lb | 920 ISK | 1,400 ISK | 2,800 ISK |
Rice 1 kg or 1 lb
Tomato 1 kg or 1 lb
Apples 1 kg or 1 lb Commute, travel, and transportation costs
20 minutes taxi ride | 570 ISK | 690 ISK | 1,400 ISK |
Average car full tank | 3,400 ISK | 4,600 ISK | 9,200 ISK |
Average car 1-day rental | 3,400 ISK | 4,600 ISK | 6,900 ISK |
Average car price | 1.7M ISK | 3.4M ISK | 4.6M ISK |
Bus ticket one way
Car Service | 4,600 ISK | 6,900 ISK | 14,000 ISK |
Utility cost (monthly)
Utility Bill - Individual | 8,700 ISK | 26,000 ISK | 170,000 ISK |
Utility Bill - Couple | 12,000 ISK | 36,000 ISK | 190,000 ISK |
Utility Bill - Family | 10,000 ISK | 29,000 ISK | 160,000 ISK |
Internet and cable | 3,400 ISK | 6,900 ISK | 9,200 ISK |
Mobile phone charges | 2,800 ISK | 4,600 ISK | 14,000 ISK |
Leisure and activities costs
Movie ticket | 1,700 ISK | 2,300 ISK | 3,400 ISK |
One month gym membership | 5,500 ISK | 6,900 ISK | 14,000 ISK |
Cloths and accessories costs
Pair of jeans or pants | 4,100 ISK | 5,700 ISK | 8,600 ISK |
Woman dress | 3,800 ISK | 5,300 ISK | 17,000 ISK |
Woman shoes | 3,600 ISK | 4,900 ISK | 11,000 ISK |
Men's shoes | 3,100 ISK | 3,800 ISK | 7,700 ISK |
Men suit | 3,400 ISK | 4,300 ISK | 23,000 ISK |
Regular t-shirt | 1,700 ISK | 2,300 ISK | 6,900 ISK |
Housing costs / monthly rent
Studio apartment | 57,000 ISK | 86,000 ISK | 230,000 ISK |
1-bedroom apartment | 86,000 ISK | 140,000 ISK | 340,000 ISK |
2-bedroom apartment | 110,000 ISK | 170,000 ISK | 460,000 ISK |
Housing costs / Buying
Studio apartment | $84,000 | $130,000 | $250,000 |
1-bedroom apartment | $100,000 | $170,000 | $630,000 |
2-bedroom apartment Furniture Costs
King Size Bed | 69,000 ISK | 86,000 ISK | 110,000 ISK |
Double Bed | 46,000 ISK | 69,000 ISK | 86,000 ISK |
Single Bed | 41,000 ISK | 53,000 ISK | 69,000 ISK |
Living Room | 77,000 ISK | 99,000 ISK | 340,000 ISK |
Dining Table | 34,000 ISK | 46,000 ISK | 86,000 ISK |
Sofa or Couch | 46,000 ISK | 63,000 ISK | 140,000 ISK |
Electronics and House Appliance Costs
TV Set | 46,000 ISK | 69,000 ISK | 140,000 ISK |
Fridge or Freezer | 41,000 ISK | 63,000 ISK | 86,000 ISK |
Washing Machine | 53,000 ISK | 77,000 ISK | 140,000 ISK |
Stove or Cooker | 49,000 ISK | 63,000 ISK | 86,000 ISK |
Mobile Phone | 57,000 ISK | 69,000 ISK | 99,000 ISK |
Laptop or Computer | 63,000 ISK | 77,000 ISK | 140,000 ISK |
Expenditure to Income Ratio in Iceland
One of the most definite ways to determine how affordable a place is measuring the ratio of expenses to salary. A high expense-to-income to ratio indicates a high cost-of-living index while a low expenditure-to-salary ratio means the place is affordable to live in.
Spending to Income Ratio
81%
71% to 91%
( expenditure / income ) x 100
Expense to income distribution levels
| Spending To Income Ratio | % People |
|---|
| < 50% | 8% |
| 50% - 60% | 14% |
| 60% - 70% | 20% |
| 70% - 80% | 28% |
| 80% - 90% | 12% |
| 90% - 100% | 7% |
| 100% - 110% | 4% |
| 110% - 120% | 3% |
| 120% - 130% | 2% |
| 130% - 140% | 1% |
| > 140% | 1% |
Interpretation and Analysis
The average spending-to-salary ratio in Iceland is 81%
This means that on average, people spend around 81% of their income for living.
According to the distribution table, 20% of the population spend approximately 60% to 70% of their income every month.
How can spending be more than income?
A value higher than 100% means that the expenditure of those people is higher than their income. They are spending more than what they earn. This is possible in two scenarios. They are either borrowing from their savings to survive or they are borrowing from other sources (relatives, friends, banks, etc.). More about this in the debt section.
Individual
73%
Spending-Income-Ratio
64%
82%
Couple
77%
Spending-Income-Ratio
68%
87%
Family
85%
Spending-Income-Ratio
75%
96%
How do people spend their money in Iceland?
We asked thousands of people about their spending habits and expenditure breaks. Below are their answers.
The percentage figures in this section are percentages of total spending not income. If you would like to see the percentage of expenses as related to income or salary, see other sections.
Housing Expenditure29%
29% of total expenses on average (18% to 37%)
| LOW | $110 15,000 ISK |
| AVERAGE | $1,400 190,000 ISK |
| HIGH | $14,000 1.9M ISK |
| Per Month |
People living in Iceland typically spend from 18% to 37% of their total monthly expenditure on housing with 29% being the average. The average spend on housing is 190,000 ISK with expenditure ranging from 15,000 ISK to 1.9M ISK. This cost mainly goes for rent but it also includes other accommodation-related expenses. Housing costs are highest for families and lowest for students as expected.
Utilities, Electricity, Water5%
5% of total expenses on average (2% to 9%)
| LOW | $18 2,400 ISK |
| AVERAGE | $230 32,000 ISK |
| HIGH | $2,300 320,000 ISK |
| Per Month |
Utility expenditure like electricity, water, and gas in Iceland ranges from 2% to 9% of total expenses with 5% being the average. The average monthly cost of utilities is 32,000 ISK with 2,400 ISK and 320,000 ISK being the upper and lower limits.
Transport, Fuel, Commute10%
10% of total expenses on average (5% to 14%)
| LOW | $35 4,900 ISK |
| AVERAGE | $460 63,000 ISK |
| HIGH | $4,600 630,000 ISK |
| Per Month |
Fuel consumption and cost of transport depend heavily on whether you live near your work or school, but roughly speaking you would expect to spend from 4,900 ISK to 630,000 ISK on commuting with 63,000 ISK being the norm for most people in one month. This means that money spent on transport constitutes about 10% of total spending on average but can go as low as 5% or as high as 14%.
Food and Groceries Cost25%
25% of total expenses on average (17% to 31%)
| LOW | $88 12,000 ISK |
| AVERAGE | $1,100 160,000 ISK |
| HIGH | $11,000 1.6M ISK |
| Per Month |
The average outlay on groceries in a month in Iceland is 160,000 ISK. The cost of groceries can range between 12,000 ISK to 1.6M ISK. People spend on average about 25% on food and groceries with upper and lower bounds of 17% and 31% respectively.
Healthcare and Medical Services7%
7% of total expenses on average (2% to 10%)
| LOW | $25 3,400 ISK |
| AVERAGE | $320 44,000 ISK |
| HIGH | $3,200 440,000 ISK |
| Per Month |
People in Iceland allocate 2% to 10% of their total monthly expenditure to healthcare including health insurance and out-of-pocket medical expenses. The average spending is around 7%. The range of medical expenses range from 3,400 ISK to 440,000 ISK with 44,000 ISK being the norm.
Leisure and Shopping7%
7% of total expenses on average (3% to 11%)
| LOW | $14 1,900 ISK |
| AVERAGE | $180 25,000 ISK |
| HIGH | $1,800 250,000 ISK |
| Per Month |
This category mostly contains discretionary or non-essential expenses but also some non-discretionary spending like furniture for example. The monthly expenses range from 1,900 ISK to 250,000 ISK with 25,000 ISK being the average. Speaking of percentages, that equates to 3% to 11% of total expenses with an average of 7% for most residents.
Education and Schooling6%
6% of total expenses on average (4% to 12%)
| LOW | $21 2,900 ISK |
| AVERAGE | $280 38,000 ISK |
| HIGH | $2,800 380,000 ISK |
| Per Month |
Spending on education can vary drastically between different people. While working singles can spend 0% on education, families and students' expenditure can reach up to 22%. On average, education constitutes 6% of the monthly expenditure with 4% and 12% being the lower and upper bounds respectively. The average reported education cost is 38,000 ISK per month with 2,900 ISK being the minimum spent amount and 380,000 ISK being the maximum.
Other Expenses10%
10% of total expenses on average (5% to 17%)
| LOW | $46 6,300 ISK |
| AVERAGE | $600 82,000 ISK |
| HIGH | $6,000 820,000 ISK |
| Per Month |
How much money can you save in Iceland every month?
We asked thousands of people what percentage of their income can they save in a month. Below are the answers.
What percentage of people in Iceland manage to save money from their income every month?
Almost 74% of the surveyed people in Iceland said that they can save some money at the end of each month while 26% said that aren't saving anything.
Percentage of people saving money by population group in Iceland
| Group | Savers | Non Savers |
|---|
| Singles | 74% | 26% |
| Couples | 69% | 31% |
| Families | 64% | 36% |
Savings-to-Income Ratio
The savings-to-income ratio is measured as the percentage of income that people save over a specific period and it is simply calculated by dividing the saved money by total income and then multiplying the result by 100. (Savings / Income) x 100.
Saving to Income Ratio
Average Monthly Saved Amount
20,000 ISK
$150 | 260,000 ISK
$1,900 | 2.6M ISK
$19,000 |
For most people, 14% to 34% of their monthly income is what they can allocate to their savings, with 24% being the average. The amount of money that people can save is approximately 260,000 ISK on average with savings ranging from 20,000 ISK to 2.6M ISK.
74% of surveyed singles reported some of their income going to savings while 69% of couples said the same. 64% of families confirmed their ability to save money.
How much money do people actually save in Iceland?
The amount of money that people can afford to save depends hugely on their income. It is better to focus on the percentage when trying to understand saving patterns.
Singles
Saving to Income Ratio
Average Monthly Saved Amount
61,000 ISK
$440 | 180,000 ISK
$1,300 | 1.2M ISK
$8,900 |
Savings to income distribution levels for singles
| Saving To Income Ratio | % Singles |
|---|
| 0% - 10% | 26% |
| 10% - 20% | 21% |
| 20% - 30% | 15% |
| 30% - 40% | 19% |
| 40% - 50% | 14% |
| > 50% | 5% |
Interpretation and Analysis
Singles who can afford to save reported that they allocate from 17% to 36% of their monthly income to savings, with 28% being the average for most singles. The average amount of money that singles are able to save is 180,000 ISK with 61,000 ISK and 1.2M ISK being the minimum and maximum respectively.
Couples
Saving to Income Ratio
Average Monthly Saved Amount
100,000 ISK
$740 | 310,000 ISK
$2,200 | 1.6M ISK
$12,000 |
Savings to income distribution levels for couples
| Saving To Income Ratio | % Couples |
|---|
| 0% - 10% | 30% |
| 10% - 20% | 23% |
| 20% - 30% | 18% |
| 30% - 40% | 14% |
| 40% - 50% | 11% |
| > 50% | 4% |
Interpretation and Analysis
Couples who confirmed their ability to save reported saving equivalent to 15% to 35% of their monthly income, with 26% being the average for most couples. The average amount of money that couples can save is 310,000 ISK with 100,000 ISK and 1.6M ISK being the minimum and maximum respectively.
Families
Saving to Income Ratio
Average Monthly Saved Amount
140,000 ISK
$1,000 | 410,000 ISK
$3,000 | 2.2M ISK
$16,000 |
Savings to income distribution levels for families
| Saving To Income Ratio | % Families |
|---|
| 0% - 10% | 33% |
| 10% - 20% | 26% |
| 20% - 30% | 19% |
| 30% - 40% | 11% |
| 40% - 50% | 8% |
| > 50% | 3% |
Interpretation and Analysis
Families in Iceland can save anywhere between 13% to 31% of their monthly income, with 22% being the average for most families. The average amount of money that families can put aside is 410,000 ISK with 140,000 ISK and 2.2M ISK being the minimum and maximum respectively.
A typical and healthy budgeting structure
The 50/30/20 rule
Spending among different people can vary significantly based on factors such as their income, lifestyle,
location, and personal preferences. A commonly used guideline for budgeting is the 50/30/20 rule,
which suggests allocating your income into three main categories in the following percentages.
50% for needs and financial obligations
This category includes essential expenses like housing, utilities, groceries, transportation, and healthcare.
30% for wants and discretionary spending
This category covers discretionary spending on non-essential items, such as dining out, entertainment, travel, and other lifestyle choices.
20% for savings and emergency fund
This is the percentage that must be allocated to savings, emergency funds, and retirement accounts.
About financial planning, money management, and household budgeting
The 50/30/20 rule is used as a general guideline but may not be the best choice for all people. There are in fact many budgeting plans out there like the 70/20/10 and the 60/20/20 rules, all claiming to be the best. More important than all of this is to establish financial discipline by creating a budget tailored to your specific financial goals and situation. It is very important that your financial outflow be less than your income to maintain a healthy cash flow.
Affordable living in Iceland
Income and cost of living compatibility
We asked residents one simple question and recorded their answers.
Is it affordable or economical to live in Iceland?
Around 83% of surveyed residents think that living in Iceland is affordable with proper budgeting while 17% reported that it is just too expensive and not affordable even with frugality and thriftness.
Low-cost alternatives in Iceland
People are always looking for ways to cut down expenses and reduce expenditures. The hallmark of any affordable place is the availability of discount stores, bargain deals, smart or secondhand shopping, refurbished items, and couponing. We asked residents how easily cost-cutting is and the answers were distributed as follows:
Plenty of low-cost options64%
Few low-cost options36%
Based on the survey, 64% of the people living in Iceland have no problem finding low-cost alternatives to support a frugal lifestyle while 36% think that thriftness is difficult due to scarcity in discount markets and secondhand outlets.
Emergency Funds
An emergency fund is a financial safety net comprised of easily accessible savings set aside to cover unexpected expenses or financial emergencies, typically amounting to three to six months' worth of living expenses. We asked residents of Iceland whether they have an emergency fund and the answers were as follows.
Yes83%
No17%
Based on the survey, 17% of the people living in Iceland said that they don't have an emergency fund while 83% said that they do.
Financial Literacy in Iceland
Financial literacy is the knowledge of concepts and principles related to personal finance that allow individuals to make informed decisions regarding their money such as budgeting, saving, investing, borrowing, managing debt, financial risk management, and planning.
Financial Leteracy78%
We asked residents of Iceland whether they acquired any adequate personal financial training in their lives. Approximately 22% of the people who participated in the survey said that they are not well informed about the topics of budgeting, saving, etc., and just manage things based on their own experience, while 78% said that they know about the general principles of personal finance from sources other than their own experience.
Difficulty in Budgeting and Financial Planning
We wanted to understand whether residents of Iceland have problems or difficulties in managing their expenditures and savings so asked the people one simple question: do you struggle with your personal finances? 13% of the participants reported that they indeed struggle in creating budgets and in organizing their finances while 87% said that they have everything under control.
Struggles with finance13%
Easily manages finances87%
Financial goals of people in Iceland
In an attempt to understand the economic situation in Iceland, we asked participants about their financial targets. By knowing what the population in general is trying to achieve, we can shed light on the economic outlook, cost of living, and quality of life in general.
| Financial Goal | % People |
|---|
| Emergency Fund | 5% |
| Debt Reduction | 25% |
| Retirement Savings | 5% |
| Education Funding | 10% |
| Homeownership | 15% |
| Investing | 11% |
| Travel or Lifestyle | 14% |
| Healthcare Expenses | 5% |
| Financial Independence | 11% |
Around 5% of those who participated in the survey said that their main goal is to establish an emergency fund to cover unexpected expenses while 25% said their number one priority is to pay off high-interest debt or loans and improve credit. 5% of surveyed people confirmed that saving for retirement to ensure a comfortable lifestyle in the final years is their main target. Around 10% reported that their priority is saving for the tuition fees and education costs of their children while 15% choose to buy a home or pay off existing mortgage before other things. 11% of the population would like to build wealth through investments such as stocks, bonds, mutual funds, or real estate. For 14% of people, saving for vacations or upgrading their lifestyle is the number one concern. Approximately 5% of the residents said that saving for healthcare expenses including insurance premiums is their main goal.
Saving Challenges in Iceland
Reasons that make it difficult for people to save money
We wanted to understand what is stopping people from maximizing their savings in Iceland. Listed below are the answers given by the survey participants.
| Reason | % People |
|---|
| Low Income | 8% |
| High Expenses | 11% |
| Debt and Loans | 22% |
| Lack of Budgeting Skills | 9% |
| Impulsive Spending | 7% |
| Financial Emergencies | 5% |
| Living the moment | 8% |
| Will do it later | 14% |
| Inflation | 8% |
| Social Pressure | 4% |
| Market Instability | 4% |
Around 8% of the people said that their salary is too low to accommodate a portion for savings while 11% said that the high cost of living leaves little room for savings. 22% of the residents said that they are burdened with debt and find it challenging to save money. 9% reported that they just don't have the knowledge or discipline to create and stick to a budget, leading to overspending and an inability to save. 7% blamed impulsive spending as the reason for saving inability. Around 5% said that unexpected expenses like medical bills or car repairs are derailing their savings goals. 8% bluntly said that they don't see the purpose of it and prefer to live each day to the fullest. 14% reported that they understand the value of saving but are putting off saving for the future, thinking they have plenty of time to start later. 8% blamed inflation, saying that every time they save some money they end up using it immediately. A surprising 4% said that social pressure and keeping up with peers or societal expectations makes them overspend. Lastly, 4% blamed market instability and price fluctuations.
Typical saving choices for people in Iceland
Where do people choose to put their savings?
| Saving Type | % People |
|---|
| Emergency Funds | 9% |
| Gold | 8% |
| Savings Accounts | 18% |
| Retirement Accounts | 13% |
| Cash Savings | 12% |
| Real Estate | 11% |
| Investment | 7% |
| Stocks | 8% |
| Bonds | 8% |
| Mutual Funds | 4% |
| Certificates of Deposit | 4% |
Retirement, pension plans, and life after work in Iceland
What does the retirement lifestyle look like in Iceland and how much retirement savings are required?
Retirement age
The retirement age for most employees in Iceland is 65 years. Specific retirement ages can vary based on factors like occupation, gender, years of contribution, and location. It is not entirely unlikely for people to retire either before or after this age.
Retirement planning and savings
There are many retirement saving options, some are personally initiated and others are government-sponsered. Regardless of the source of savings, the minimum amount of money that needs to be put aside to ensure a peaceful and comfortable retirement at each age can be found in the table below. This data is largely approximated and can vary drastically based on individual needs and situations. Treat these figures as a general guideline.
The typical saved amount of money you should have at every age as multiples of monthly salary:| Age | Amount |
|---|
| 25 | 5x monthly salary at age 25 |
| 30 | 10x monthly salary at age 30 |
| 35 | 15x monthly salary at age 35 |
| 40 | 25x monthly salary at age 40 |
| 45 | 32x monthly salary at age 45 |
| 50 | 48x monthly salary at age 50 |
| 55 | 56x monthly salary at age 55 |
| 60 | 64x monthly salary at age 60 |
| 65 | 78x monthly salary at age 65 |
The typical average saved amount of money you should have at every age in Iceland:| Age | Amount |
|---|
| 25 | 1.8M ISK |
| 30 | 3.6M ISK |
| 35 | 6.3M ISK |
| 40 | 9M ISK |
| 45 | 13M ISK |
| 50 | 19M ISK |
| 55 | 22M ISK |
| 60 | 28M ISK |
| 65 | 33M ISK |
Retirement Income Distribution
We asked residents of Iceland about their retirement income sources and below are the results.
| Source | % People |
|---|
| Pensions | 15% |
| Savings | 20% |
| Investments | 15% |
| Social Security | 10% |
| Annuities | 10% |
| Part-time Job | 6% |
| Real Estate | 15% |
| Dividends and Interest | 10% |
Retirement Monthly Expenses in Iceland 100,000 ISK
$760 | 310,000 ISK
$2,300 | 2.1M ISK
$15,000 |
Debt, loans, and mortgages in Iceland
Percentage of people who are in debt
According to the survey, 21% of the people in Iceland have some kind of debt, loan, mortgage, or credit card payments while 79% reported that they don't have financial obligations to banks.
Debt-to-income ratio in Iceland
Debt to income ratio
26%
16% to 36%
( monthly debt payment / monthly income ) x 100
Interpretation
The debt-to-income ratio measures the percentage of income being paid as debt settlement across the population. It is calculated by dividing the monthly debt settlement payment of an individual by their monthly income. Based on collected data, approximately 26% of the people's monthly income in Iceland goes to debt settlement.
Debt levelsMonthly debt settlement payment as percentage of monthly income
| Debt-to-income ratio | % People |
|---|
| > 60% | 2% |
| 50% - 60% | 6% |
| 40% - 50% | 9% |
| 30% - 40% | 11% |
| 20% - 30% | 19% |
| 10% - 20% | 24% |
| 0% - 10% | 30% |
According to our data, 2% of the debtors in Iceland pay 60%+ of their income as debt settlement while 6% of the people pay 50% to 60% of their income for the same, which is quite an alarming financial situation for those individuals. 9% of people in debt dedicate 40% to 50% of their income to loan and mortgage payments while 11% dedicated 30% to 40% of income for same. Things are looking brighter for 19% of individuals as they only pay 20% to 30% of their income for loan and credit card repayment.
Distribution by type of debt in Iceland
| Debt | % People |
|---|
| Real Estate Mortgage | 17% |
| Auto Loan | 29% |
| Student Loan | 2% |
| Credit Card | 21% |
| Personal Loan | 31% |
17% of debtors in Iceland confirm that real estate mortgages constitutes the main part of their outstanding debt while 21% say that credit card payments are the reason they are in debt. Auto loans were the main type of debt for 29% of people and personal loans rose at 31%. Lastly, student loans are the main source of debt for 2% of debtors in Iceland.
About credit score and debt managementManaging debt is a critical aspect of maintaining a favorable credit score. Debt reduction is the first thing you should do improve your financial situation. Getting rid of debt takes precedence over saving money because of interest rates.
Good debt vs. Bad debt
Not all debt is bad. Good debt typically refers to borrowing money for investments that can increase in value or generate income over time like purchasing a home or acquiring student loans. On the other hand, bad debt involves borrowing for things that fail to generate lasting value like high-interest credit card debt used for non-essential expenses like luxury items or vacations.
Loan Affordability Index in Iceland
Besides measuring the loan-to-income ratio, we asked residents of Iceland how many times in a year they defaulted or were unable to pay their due credit card or loan payments on time. Understanding how often people default on their due payments is one of the indicators of the cost of living and economic situation.
Frequency and percentage of people who failed to pay their monthly credit card or loan payments on time last year.
| Frequency | % People |
|---|
| Never | 59% |
| Once a year | 20% |
| Twice a year | 10% |
| Three times a year | 7% |
| Four times a year | 3% |
Housing costs, accommodation, and housing affordability in Iceland
Rental costs and house/apartment prices can vary drastically between different areas and locations.
Rent Cost in Iceland
Monthly Rent Prices
Studio apartment | 57,000 ISK | 86,000 ISK | 230,000 ISK |
1-bedroom apartment | 86,000 ISK | 140,000 ISK | 340,000 ISK |
2-bedroom apartment | 110,000 ISK | 170,000 ISK | 460,000 ISK |
3-bedroom apartment | 140,000 ISK | 230,000 ISK | 630,000 ISK |
Furnished apartment | 280,000 ISK | 690,000 ISK | 1.4M ISK |
Townhouse | 230,000 ISK | 340,000 ISK | 990,000 ISK |
House | 280,000 ISK | 690,000 ISK | 1.4M ISK |
Villa | 340,000 ISK | 860,000 ISK | 1.4M ISK |
The monthly rental cost of a studio apartment in Iceland ranges between 57,000 ISK and 230,000 ISK, meanwhile the cost of monthly rental of a one-bedroom apartment can be anywhere from 86,000 ISK to 340,000 ISK. Two-bedroom rentals rate ranges between 110,000 ISK and 460,000 ISK per month. The monthly rental for a three-bedroom apartment ranges from 140,000 ISK to 630,000 ISK. The average rent of a townhouse in Iceland is around 340,000 ISK while house rental costs can be as high as 690,000 ISK per month. Finally, if you want to rent a villa, expect to pay anywhere from 340,000 ISK to 1.4M ISK per month.
Apartment and house prices in Iceland
Cost of buying a property
Studio apartment | $84,000 | $130,000 | $250,000 |
1-bedroom apartment | $100,000 | $170,000 | $630,000 |
2-bedroom apartment
3-bedroom apartment | 77M ISK | 110M ISK | 340M ISK |
Townhouse | 99M ISK | 230M ISK | 860M ISK |
House | 110M ISK | 690M ISK | 990M ISK |
Villa | 140M ISK | 770M ISK | 1,100M ISK |
The average price of a studio apartment in Iceland can range from 11M ISK to 34M ISK depending on location. One bedroom cost can be anywhere from 14M ISK to 86M ISK. A villa can cost you 770M ISK on average with prices ranging from 140M ISK to 1,100M ISK.
If you're leasing or purchasing, housing costs in Iceland will probably constitute your biggest expenditure, yet it's an area where you wield considerable influence. This is due to the substantial variance in housing prices across communities. Keep in mind the location of your workplace and the accessibility of essential amenities to prevent negating the savings from lower rental rates with increased transportation expenses.
House / apartment prices to income ratio
Property price to income ratio( average property price / average monthly income ) x 100
| 48 | x144 monthly income | 226 |
Property prices in Iceland can be x144 to x226 multiples of the monthly income depending on the property and the income of the person. On average, property prices are approximately x144 multiples of the average monthly salary in Iceland.
Rent to income ratio
Rent to income ratio( monthly rental / monthly income ) x 100
The average rent-to-income ratio in Iceland is around 34%. This means that people pay 34% of their income for rent. Those figures can range from 24% to 44% depending on the salary, location, and type of property.
The housing-to-income ratio is a very important metric to evaluate and measure how affordable living is in a particular area, city, or country since housing comprises the biggest chunk of expenditure. A higher housing to income ratio means that the place is relatively expensive. The figure by itself does tell much. It only starts to make sense when comparing the housing to income ratio across different locations.
Housing affordability index
The housing affordability index measures how affordable accommodation is in a particular place. This can measured in multiple ways, the most common being housing expenditure to total expenditure ratio and the rent to income ratio. The housing expenditure ratio is a figure reported by individuals on the percentage they allocate for housing. Rent to income ratio is calculated by dividing the average monthly rent by the average income. Because these values are both percentages, we can find their average and get the best of the two worlds.
Housing Affordability Index
32% Property Taxes
Real estate owners pay property taxes to local tax authorities, which are determined by the assessed value of their property. Typically, these taxes are paid once a year. Property tax funds contribute to community development, financing infrastructure improvements, public services, and local education initiatives.
Home Maintenance Costs
Home maintenance costs encompass various expenses associated with the upkeep and repair of a residence. These expenditures include regular tasks such as lawn care, pest control, and HVAC system servicing, as well as occasional repairs and renovations like fixing leaks, painting, or replacing appliances.
| 970 ISK | 13,000 ISK | 130,000 ISK |
Urban vs. rural living costs
Urban living typically entails higher housing and transportation costs due to demand and limited space, while rural areas generally offer lower housing expenses but may have higher prices for goods and services. The differnce in rental rates between urban areas and rural areas can be as high as 300% in some cases.
SingleSpending habits, consumption analysis, and expenditure patterns for a single person living in Iceland
Housing35%
35% of total expenses on average (23% to 47%)
| LOW | $380 52,000 ISK |
| AVERAGE | $1,100 160,000 ISK |
| HIGH | $7,600 1M ISK |
| Per Month |
Utilities, Electricity, Water6%
6% of total expenses on average (2% to 11%)
| LOW | $64 8,700 ISK |
| AVERAGE | $190 26,000 ISK |
| HIGH | $1,300 170,000 ISK |
| Per Month |
Transport, Fuel8%
8% of total expenses on average (6% to 14%)
| LOW | $85 12,000 ISK |
| AVERAGE | $250 35,000 ISK |
| HIGH | $1,700 230,000 ISK |
| Per Month |
Food and Groceries16%
16% of total expenses on average (10% to 21%)
| LOW | $170 23,000 ISK |
| AVERAGE | $510 70,000 ISK |
| HIGH | $3,400 470,000 ISK |
| Per Month |
Healthcare9%
9% of total expenses on average (3% to 13%)
| LOW | $95 13,000 ISK |
| AVERAGE | $290 39,000 ISK |
| HIGH | $1,900 260,000 ISK |
| Per Month |
Leisure, Shopping5%
5% of total expenses on average (4% to 8%)
| LOW | $53 7,300 ISK |
| AVERAGE | $160 22,000 ISK |
| HIGH | $1,100 150,000 ISK |
| Per Month |
Education2%
2% of total expenses on average (1% to 4%)
| LOW | $21 2,900 ISK |
| AVERAGE | $64 8,700 ISK |
| HIGH | $420 58,000 ISK |
| Per Month |
Other Expenses18%
18% of total expenses on average (10% to 22%)
| LOW | $190 26,000 ISK |
| AVERAGE | $570 79,000 ISK |
| HIGH | $3,800 520,000 ISK |
| Per Month |
CoupleAverage monthly living expenditure breaks and spending patterns for couples in Iceland
Housing32%
32% of total expenses on average (25% to 42%)
| LOW | $580 80,000 ISK |
| AVERAGE | $1,700 240,000 ISK |
| HIGH | $9,300 1.3M ISK |
| Per Month |
Utilities, Electricity, Water5%
5% of total expenses on average (3% to 9%)
| LOW | $88 12,000 ISK |
| AVERAGE | $270 36,000 ISK |
| HIGH | $1,400 190,000 ISK |
| Per Month |
Transport, Fuel12%
12% of total expenses on average (6% to 17%)
| LOW | $210 29,000 ISK |
| AVERAGE | $640 87,000 ISK |
| HIGH | $3,400 470,000 ISK |
| Per Month |
Food and Groceries14%
14% of total expenses on average (9% to 19%)
| LOW | $250 34,000 ISK |
| AVERAGE | $740 100,000 ISK |
| HIGH | $4,000 540,000 ISK |
| Per Month |
Healthcare11%
11% of total expenses on average (5% to 15%)
| LOW | $190 27,000 ISK |
| AVERAGE | $580 80,000 ISK |
| HIGH | $3,100 430,000 ISK |
| Per Month |
Leisure, Shopping6%
6% of total expenses on average (3% to 9%)
| LOW | $110 15,000 ISK |
| AVERAGE | $320 44,000 ISK |
| HIGH | $1,700 230,000 ISK |
| Per Month |
Education2%
2% of total expenses on average (1% to 4%)
| LOW | $35 4,900 ISK |
| AVERAGE | $110 15,000 ISK |
| HIGH | $570 78,000 ISK |
| Per Month |
Other Expenses17%
17% of total expenses on average (11% to 23%)
| LOW | $300 41,000 ISK |
| AVERAGE | $900 120,000 ISK |
| HIGH | $4,800 660,000 ISK |
| Per Month |
FamilyAverage monthly expenses and break out of spending for families living in Iceland
Housing31%
31% of total expenses on average (26% to 41%)
| LOW | $790 110,000 ISK |
| AVERAGE | $2,300 310,000 ISK |
| HIGH | $12,000 1.7M ISK |
| Per Month |
Transport, Fuel8%
8% of total expenses on average (6% to 10%)
| LOW | $200 27,000 ISK |
| AVERAGE | $570 78,000 ISK |
| HIGH | $3,100 430,000 ISK |
| Per Month |
Food and Groceries18%
18% of total expenses on average (11% to 24%)
| LOW | $450 61,000 ISK |
| AVERAGE | $1,300 170,000 ISK |
| HIGH | $7,000 960,000 ISK |
| Per Month |
Healthcare8%
8% of total expenses on average (4% to 13%)
| LOW | $200 27,000 ISK |
| AVERAGE | $570 78,000 ISK |
| HIGH | $3,100 430,000 ISK |
| Per Month |
Leisure, Shopping5%
5% of total expenses on average (3% to 9%)
| LOW | $120 17,000 ISK |
| AVERAGE | $350 49,000 ISK |
| HIGH | $1,900 270,000 ISK |
| Per Month |
Education14%
14% of total expenses on average (7% to 22%)
| LOW | $350 48,000 ISK |
| AVERAGE | $990 140,000 ISK |
| HIGH | $5,400 750,000 ISK |
| Per Month |
Other Expenses12%
12% of total expenses on average (5% to 17%)
| LOW | $300 41,000 ISK |
| AVERAGE | $850 120,000 ISK |
| HIGH | $4,700 640,000 ISK |
| Per Month |
StudentCost of living and expenses break down for students living in Iceland
Housing23%
23% of total expenses on average (18% to 29%)
| LOW | $220 30,000 ISK |
| AVERAGE | $540 74,000 ISK |
| HIGH | $980 130,000 ISK |
| Per Month |
Utilities, Electricity, Water4%
4% of total expenses on average (2% to 8%)
| LOW | $36 5,000 ISK |
| AVERAGE | $90 12,000 ISK |
| HIGH | $160 22,000 ISK |
| Per Month |
Transport, Fuel7%
7% of total expenses on average (6% to 13%)
| LOW | $63 8,700 ISK |
| AVERAGE | $160 22,000 ISK |
| HIGH | $280 39,000 ISK |
| Per Month |
Food and Groceries20%
20% of total expenses on average (14% to 24%)
| LOW | $180 25,000 ISK |
| AVERAGE | $450 62,000 ISK |
| HIGH | $810 110,000 ISK |
| Per Month |
Healthcare6%
6% of total expenses on average (3% to 9%)
| LOW | $54 7,400 ISK |
| AVERAGE | $140 19,000 ISK |
| HIGH | $240 34,000 ISK |
| Per Month |
Leisure, Shopping5%
5% of total expenses on average (3% to 9%)
| LOW | $45 6,200 ISK |
| AVERAGE | $110 16,000 ISK |
| HIGH | $200 28,000 ISK |
| Per Month |
Education19%
19% of total expenses on average (12% to 24%)
| LOW | $170 24,000 ISK |
| AVERAGE | $430 59,000 ISK |
| HIGH | $770 110,000 ISK |
| Per Month |
Other Expenses15%
15% of total expenses on average (9% to 21%)
| LOW | $140 19,000 ISK |
| AVERAGE | $340 47,000 ISK |
| HIGH | $610 84,000 ISK |
| Per Month |
