With effect from October, the MNB will revise the terms and conditions of its borrowing, except for the fixed-rate versions for ten years. That is, it directs consumers towards more stable and secure home loans.
We can spend less on loan repayments
What will happen? The state changes the rules of housing loans in such a way that from the autumn, not 50 percent of the monthly income below 400 thousand HUF , but
- In the case of variable rate loans, only 25 percent
- 35 per cent for loans with a fixed interest rate maturity of at least 5 years but not 10 years
reversible repayment. That is, it can be the monthly installment. This, of course, also limits the amount you can withdraw and the length of time you can get past the loan repayment. What remains unchanged is a 10-year fixed rate loan – that is, a more expensive loan.
If we can justify more than 400,000 forints , then
- 30% in the case of a floating interest rate shorter than 5 years
- 40% for loans with a maturity of at least 5 years but not for 10 years
can be the ratio of the installment to our monthly income.
If you have an interest rate period of 10 years or are fixed all the time, then as now, 50 and 60 percent can be used for loan repayments, depending on whether you earn below $ 400,000 or even more.
What’s going on October 1st?
More specific information is not yet available and the amendment is currently being discussed with the European Central Bank. It is not known whether credit agreements signed or filed on or after October 1 are affected.
If this is the case, then the change could apply to loan applications that were started 5-8 weeks earlier, as the signature is preceded by several weeks of preparation for home loans. One thing is for sure, if you are planning a home loan and you want a more modest repayment, even if your installment changes every few years, you should start applying for it as soon as possible.
There are still many risky home loans
However, it is worth noting that the purpose of the change is the same as the previous debt brake tightening: anyone who earns less should not be indebted. The MNB has already done much to develop a healthier debt and credit portfolio with Consumer-friendly Loans .
However, home borrowers are still most inclined to start with a smaller repayment, even if they know that repaying a home loan may involve risks.