Vextirnir á þessu láni eru hærri en ég bjóst við.

In financial Icelandic, vextir is usually a plural noun meaning interest or interest rates. So Icelandic treats it as plural, which is why the sentence also uses plural eru and hærri.

A very literal translation would be The interest rates on this loan are higher than I expected, even though natural English often says The interest on this loan is higher...

It is the suffixed definite article.

• vextir = interest / interest rates
• vextirnir = the interest / the interest rates

Icelandic usually adds the to the end of the noun instead of using a separate word. Here -nir is the definite ending for a nominative masculine plural noun.

Because á can take different cases depending on the meaning.

• With movement onto something, it often takes the accusative
• With location or a more static relationship, it takes the dative

Here the meaning is not physical movement. It means on this loan or for this loan, so Icelandic uses the dative:

• þessu = dative singular of þessi
• láni = dative singular of lán

Since lán is a neuter noun, þessu láni is the correct form.

Because the subject is vextirnir, which is plural. Icelandic verbs agree with the subject in number here, so you get:

• vextirnir eru = the interest rates are

If the subject were singular, you would use er instead.

Hærri is the comparative form of hár, meaning high. So hærri means higher.

Icelandic uses high / higher for things like rates, prices, and levels, just as English does. So:

• vextirnir eru hærri = the interest rates are higher

Yes. Icelandic adjectives agree with the noun they describe in gender, number, and case. Here hærri agrees with vextirnir.

Comparative forms often look the same across several forms, so you do not see a very obvious plural ending here, but it is still the correct agreeing form with vextirnir.

Here en means than, because it introduces a comparison:

• hærri en... = higher than...

In other sentences, en can also mean but, so context matters. In this sentence it clearly means than.

The dictionary form is búast við, which means to expect or to anticipate.

In this sentence:

• ég bjóst við = I expected

This is best learned as a fixed expression: búast við. If you look up only bjóst, a dictionary may direct you to búast við rather than to a simple verb bjá or something similar.

Because the object is understood from the context.

The full idea is something like:

• higher than I expected it to be
• higher than I had expected

Icelandic can leave that expected thing unspoken when it is obvious. But við stays there because it belongs to the verb expression búast við.

Yes. Icelandic often uses the simple past where English may choose either I expected or I had expected, depending on context.

Here the expectation came before the speaker discovered the actual interest rate, so English can naturally translate it as either:

• than I expected
• than I had expected

Both are good translations of the Icelandic sentence.