A consumer friendly home loan with hundreds of thousands of forints supported by the National Bank of Hungary is available as early as this summer.
Managing director of the central bank said that the bank will take over the administration of the land registry and that the initial costs will not be borne by the claimant’s wallet, he will not have to pay tens of thousands up to the bank’s reception!
So far, banks have outsourced all costs to their customers because of risk-taking and interest rates are high. Compared to Europe, Hungary has a high cost of home loans that customers bear.
If interest rate spreads are close to 4-5%, while in countries with the same risk, Only 3% in Romania, the Czech Republic or Poland.
Banks’ competition is not strong enough, despite the relatively low interest rates, not many are switching to the more expensive loans they took out earlier because the difference is not significant. For banks, the opportunity that they have with a rating application would change that. They are waiting for applications that more and more clients will have access to on more favorable terms, eg. state-subsidized and CSOK mortgages.
Here’s an example: For a newcomer to a family-friendly loan, you don’t have to pay in advance for upfront or eg. tens of thousands of appraisal fees, unlike today’s loan requests, if the bank accepts the loan and notifies you. You have to anticipate and calculate the potential payment obligations of the borrower in the future, because the bank has to tolerate and change life situations during the term as well!
The purpose of the new schemes is to ensure that the consumer market has the highest proportion of all-inclusive home loan offers. For example, customers should be able to change the interest period or possibly buy a loan. also for early repayment.
The introduction of this scheme is optional for banks and is an opportunity for credit institutions to apply voluntarily. Which bank and credit institution qualifies is entitled to the following advertisement: “We have a qualified ‘consumer friendly home loan’.
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Home loans can be up to 30 years old, and this is a very heavy financial burden for borrowers compared to earnings, so it is vital to strengthen bank competition in this area, and lower interest rates. The aim is to ensure that the now rapidly recovering housing market and thus the growth of lending will continue to be achieved through sustainable indebtedness, with the least risk for creditors. However, similar rating for other types of credit is a thoughtful step for the future!
Significantly high interest rate spreads in Hungary are most noticeable at fixed interest rates for longer maturities! Starting from floating rate loans with relatively shorter maturities, qualifying consumer-friendly home loans can be reduced by up to 1-1.5% for longer-term loans.
We also aim to reduce other costs associated with the loan. Prepayment fees have been reduced by half and disbursement fees have been capped at a much lower level. The bank charges “only” the following: ownership fee, map copy, site plan, mortgage registration fee, valuation, and notary fees.