Life in Iceland now
How are households doing?
Pay buys about the same
Kibba: A basket of food that cost ISK 10,000 a year earlier now costs ISK 10,385. Pay buys about as much as a year earlier. In our example loan, the monthly payment equals 41% of median pay before tax.
- No overall score here: each section below stands on its own.
Household money
The household in numbers
- Purchasing power to Sep 2026 −0.3% Pay rise above inflation
- Inflation with housing — CPI to Oct 2026 5.9% 12-month change in consumer prices
- House prices to Q2 2026 −1.5% Change above inflation
- Unemployment to Sep 2026 6.1% Share of the labour force out of work
Food
- Food prices to Oct 2026 +3.8% All prices: 5.9%
🧺 A basket of food that cost ISK 10,000 a year earlier now costs ISK 10,385
Loan example (a standard comparison)
A standard example of the cost of a new loan against one person's wage, not the measured burden of Icelandic households.
Assumptions of the example
A standard example with fixed assumptions, to compare the cost of a new loan between years: the same home, a loan of ISK 50 million in 2025 money, adjusted for house prices, over 40 years without indexation, at the central bank rate + 1.5 points as a stand-in for mortgage rates. It does not show what households actually pay: most have older loans, other rates, indexation or two incomes.
- Interest rate (estimate) 9.50%
- Term 40 years
- Median monthly wage ISK 1,012,469
- Monthly payment (interest and principal) (Exact values) ISK 415,670
- Share of the median wage 41.10%
Your settings only change this loan example. The score always uses the fixed example.
- Rent to Oct 2026 +7.4% All prices: 5.9%
Energy costs
- 💡 Electricity & heating to Oct 2026 +6.8% All prices: 5.9%
- ⛽ Petrol & diesel to Oct 2026 −4.8% All prices: 5.9%
🧾 A monthly electricity and heating bill of ISK 20,000 a year earlier now costs ISK 21,359
🚗 A tank of fuel that cost ISK 15,000 a year earlier now costs ISK 14,276
Energy combined (weights 46% electricity and heating, 54% fuel): +0.5% in nominal terms. Headline inflation was 5.9%, so relative to inflation the change is −5.1%. That figure goes into the score.
Change in price from the year before (CPI subindices). Heating is mostly geothermal hot water.
People and services
People & health
- Residents and estimated overnight guests average Oct 2025 – Sep 2026 420,363 396,500 residents + 23,863 foreign guests a night
- Most in Aug 2026 440,928 of whom 44,428 foreign guests a night
- Population now to Q2 2026 396,500 ▲ +1.2% in the last 12 months
- Net migration (2024) Older data, from 2024 +4,044
- Hospital beds (2023) Older data, from 2023 992 2.6 per 1,000 people · −1.6% from the year before
Residents plus the foreign guests staying each night on average: foreign overnight stays in registered accommodation (Statistics Iceland, SAM01601) divided by the days in the month. Guests in unregistered lodging, with friends or on cruise ships are not counted, and residents who are abroad are not subtracted, so the figure is a rough estimate.