Íbúðalánasjóður - Company Announcement

The Housing Financing Fund - Interest Rate Decision

According to paragraph 3, Article 21 of the Housing Act No. 44/1998, including
later amendments and Article 14 of Regulation No. 522/2004, on HFF mortgages
and bonds, the Board of the Housing Financing Fund has the authority to
determine the interest rate on HFF bonds based on financing cost from regular
auctions of HFF bonds on the one hand and on the weighted average financing
cost of prepaid loans on the other, in addition to an interest premium. 

HFF's interest rate decision is based on the yield at the HFF bond auction held
on February 22nd     in addition to the weighted financing cost of prepayments
on HFF bonds.  The weighted interest rate for the auction and prepaid HFF bonds
is 3.86%. 

HFF´s board suggested a 0.20% increase in the interest rate premium to the
minister of social affairs and social security. This was approved by the
minister and hence the premium for operations will be 0.30%, 0.35% for lending
risk and 0.50% for prepayment risk. 

As a result of the auction and the change in premium, HFF has decided to lower
the Fund's interest rates by 0.05%.  The rate on mortgages with a prepayment
clause will be 4.50% and the rate for mortgages without such a clause will be
5.00%.  The new rate takes effect today, February 23rd 2010.