Borrowers looking for low-interest, secure home loans can now be offered a wide range of consumer-friendly loans with low interest rates and fixed long-term installments!
Today’s loans are only numerically similar to loans received during the peak period of 2008, because today Hungarian households also make sure that the repayment installments do not rise dangerously. Qualified consumer-friendly home loans were introduced by banks precisely for their security. Foreign currency risk cannot occur among today’s borrowers.
Terms are the requirements for qualifying consumer-friendly home loans
Which have been available since summer 2017 and are becoming increasingly popular:
- annuity repayments, equal monthly installments,
- the duration of the interest period is 3, 5, 10 years or until the end of the term the interest rate fixation (from 1 October the 3-year period ceases and is replaced by 15 years),
- the credit assessment deadline is a maximum of 15 business days from the availability of the valuation,
- the payout deadline is 2 business days after the fulfillment of the payout conditions,
- the interest rate premium on the benchmark shall not exceed 3,5 percentage points,
- the disbursement fee is a maximum of 0.75% of the loan amount, but not more than HUF 150 thousand, the prepayment fee may not exceed 1% of the prepaid amount,
- and the savings that can be contractually contracted, the related government subsidy and the interest credited on them from a savings-deposit deposit are free of charge,
- it is useful to note that borrowers may request a change of interest-free period at least 30 days prior to the end of each interest period. “
The percentage of borrowers opting for a fixed rate is close to 60% of all borrowers.
The popularity of fixed-rate loans
For more than 5 years and up to 10 years increased the most, rising from 20% to 34%. Banks are tightening their debt-stopping rules for short-term loans from October, so we expect the number and proportion of safe loans to continue to increase in the coming months.
- The amount of the loan may not exceed 25-35% of the debtor’s net income.
- For mortgages with an interest rate of at least 10 years, only the 50% rule remains.
This measure will direct borrowers towards slightly more expensive but more secure home loans with an interest rate of at least 10 years.
The interest rates on fixed-rate loans have not been modified by banks, thus increasing their popularity. In addition to the significant rise in benchmark yields, the bank is directing retail customers towards more secure loans.
In the case of floating rate loans, the effect of the increase in yields has been taken into account, which is why the position of fixed rate loans has improved significantly.
Why did long-term loans become favorable?
- Increasing reference yields,
- competition between banks; and
- Pressure from the MNB
This led to the elimination of the relatively high cost of long-term home loans.
Today, the average interest rate spread on long-term housing loans is around 3%, as is the interest rate on short-term floating rates.
Unfortunately, even in Hungary, we have the highest interest rate spread on mortgages compared to the surrounding countries, in Slovakia and the Czech Republic we pay 1-1.5 percentage points, while in Hungary we pay more than 4 percentage points above the base rate.
Medium-term loans with a maturity of 10 million with a maturity of 20 years are 4.24-3.99%. They are available with a monthly installment of around $ 200.
The same value for long-term home loans is 4.80-4.95%, with our monthly installment of HUF 65,000.
According to the current line-up, it is not disputed that when competing for the most favorable market-based home loan and qualified consumer-friendly loan, the winner is the all-time fixed-term qualified loan, subject to repayment. This could be up to $ 1.7 million for a $ 10 million loan, which is not a despicable price advantage!
If you would like to take a loan or are seriously interested in your options, call our credit broker to help you make a professional decision!