Homeowners may breathe a sigh of relief

Never before have planners of buying a home on credit from the Magyar Nemzeti Bank (MNB) had to rely as much as they did in the coming weeks and months. If the MNB’s calculation falls into place, the drastic rise in housing loan interest rates seen in the recent period may ease – they draw attention to the money.hu experts. And for those who only get to buy the apartment of their dreams later, it may mean that they don’t have to take a drastically higher installment (if they can) to finance the purchase.

Barnabás Virág, Deputy Governor of the Central Bank, spoke at the World Economic Conference on 12 May:

THE MNB CANNOT DISCONTINUE THE CONTINUATION OF INTEREST RATE RAISING DUE TO CONTINUOUS INCREASE IN INFLATION, BUT THE PERIOD OF AGGRESSIVE INTEREST INCREASE ENDED,

a gradual approach can then be expected.

We are beyond serious raises

All this is good for the credible in light of the fact that the tough central bank decisions following the intensification of the monetary deterioration and the outbreak of the Russo-Ukrainian war in April were followed by severe bank lending rate increases. While the MNB still showed an average interest rate of 5.26 per cent in March, according to the money.hu calculator, the best bank offer was available at 6.09 per cent for a HUF 20 million loan at the beginning of May.

This means that anyone who takes out a loan with the above most favorable conditions must pay a installment of HUF 144,300. This is 21 percent higher than the installment of the average borrower who received a home loan at a market interest rate of 3.79 percent in May 2021, for which he currently has to repay HUF 119,000.

Plus, the best deal above will only last a few days. According to the money.hu interest rate mirror, Erste Bank, which offers the above interest rate loan, will increase by 60 basis points from 23 May, thanks to which the above loan will only be available to Erste at an interest rate of 6.69% – with a minimum income transfer of HUF 600,000.

The competition moderates the rate of interest rate hikes

In the event of a further moderation of the central bank’s moderated interest rate, if the market believes the MNB, the rapid rise in money market reference rates experienced in recent weeks may slow down. Then, according to money.hu experts, after the continuous interest rate hikes have significantly reduced the demand for loans, banks will think much more about the extent to which they reach home loan rates.

Comparison is important

The experts of money.hu also draw attention to the fact that it is still important for those who think about borrowing to be able to review the market offers, even with the help of consultants to find the most suitable constructions for them. Banks’ credit offers still vary significantly. According to the money.hu calculator

today, in the case of a loan of 20 million, with a fixed installment of 20 years and a fixed installment of 10 years, the bank’s offers for the monthly installment vary between HUF 148 and 175 thousand.

This also covers a difference of almost 20 percent for the total amount to be repaid.

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