The MNB will continue to focus its attention on domestic household loans, including home loans, given that forint-based housing loans are still very expensive. Márton Nagy, Vice President of the National Bank of Hungary, said in an interview published last Wednesday in the Magyar Hírlap that “the MNB expects a dynamic increase in home lending in the coming years” and that in 2017 the loan portfolio could rise to one percent, In 2018, growth is expected to be above five percent. The Vice-President reported that the fresh mortgage market is already healthy.
The maintenance of healthy mortgages is facilitated by debt
Brake rules that encourage prospective borrowers to pay a minimum down payment or take a pro-rated installment. It also helps to avoid the risk of future interest rate increases by increasing the number of debtors who prefer mortgage loan plans with a 3-5 to 10 year interest rate fixation and a maximum 30 year maturity.
According to the central bank’s vice president, home loan offers are still expensive and there is no adequate price competition between commercial banks in the banking market. He said that the decline in lending rates had taken place with interest rates unchanged. Comparative analyzes clearly show that home mortgage spreads are exceptionally high in Hungary.
There are several reasons for this. On the one hand, comparing home loan products is not easy, and on the other hand, changing banks has high administrative costs and, according to international comparisons, the Hungarian banking system is operating at low efficiency.
Banking should be made simpler
Cheaper and significantly faster, legislation should follow modernization and new regulation should be set to define the operational framework.
The MNB encourages and supports the rethink of regulation. Central bank experts have begun work in all three areas, and this year the Financial Stability Board will provide answers to the issues raised.
Until regulation is rethought
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