Banks signed home loan agreements worth HUF 314 billion this year, an increase of 36 per cent year-on-year. The amount of riskier new floating rate loans fell by 15 percent.
Fixed-term home loans for at least 10 years saw an increase of 26 percent
According to the latest data, riskier, variable-rate mortgages have lost their popularity, with rising interest rates immediately increasing the installment. At the same time, the entire market is expanding vigorously – according to Easycom Bank’s latest analysis of the central bank’s official market data.
Decrease in risky loans
In the first five months of the year, banks signed new mortgage loans worth HUF 314 billion, an increase of 36 per cent year-on-year. The amount of housing loans with a 3-12 month interest rate, ie variable interest rate, reached HUF 76 billion, a decrease of 15%.
According to Alodia Breen, an expert at Easycom Bank , it is a joyful change that floating rate mortgage loans have declined. This change implies that borrowers are becoming more aware of the fact that in the case of variable-rate home loans, an increase in interest rates is immediately reflected in installments , making them more risky than a fixed-term mortgage loan.
The safest home loans can count on a larger market
Recent data also shows that the safest home loan with a fixed installment of at least 10 years approached $ 19 billion in the first five months of the year, up 26 percent year-on-year. Although the proportion of mortgage loans with a fixed repayment period for a minimum of 10 years relative to the total market is low, these schemes may be more popular in the next period. “Primarily because the regulations that will give them a boost will come into effect in October . From then on, mortgage loans with a fixed installment will be subject to the 50% and 60% interest rate repayments only for a minimum period of 10 years or until the end of the term. Which means that monthly installments cannot exceed 50 percent of net income, or 60 percent in the case of higher income, ”added Alodia Breen . From October to 1-10 years, the limit on fixed-rate home loans will be reduced to 25-40 percent, depending on the time of recording and the level of income.
According to Easycom Bank’s analysis, at the beginning of July, the cheapest fixed-term mortgages for at least 10 years – 10 million forints and 20 years – were available at a full APR of less than 5 percent , which means spending below 70 thousand HUF. Alodia Breen drew attention to the fact that there are significant differences between these constructions, so it is worthwhile to find out before borrowing.