The Hungarian government got a law proposal from the Hungarian Banking Association about changing foreign currency loans into home currency loans at the end of August. If this will be made into an actual law, the monthly repayments can be reduced by 16 percent. This would be good news for all those who took a foreign currency mortgage loan, including foreign investors.
Hungarian government got several law proposals from the Hungarian Banking Association on the 27th of August, including one about changing foreign currency loans into home currency loans. If the latter will be made into an actual law, the monthly repayments of the foreign currency mortgage loans can be reduced by 16 percent. The goal of the law proposal is to change the foreign currency loans into home currency loans; the Hungarian Banking Association would like to get rid of all the foreign currency mortgage loans in five years. The Association has two plans for changing the foreign currency loans into home currency loans: the change can be discounted and immediate or gradual.
Debtors Can Get an Interest Subsidy
Applying the first version, the debtors could get a 20-percent repay discount and a 1-percent state interest subsidy. The current average interest of the foreign currency mortgage loans is 7.8 percent, and the remaining duration is 13 years. The debtors would get 20 percent off of their remaining debts. Although the average interest of the forint loans is 9.6 percent, the discount would annul the interest increase, and the debtors could also get rid of the risks of the exchange rates developing unfavorably.
The Discussions Are Still On
According to the gradual change the duration of the foreign currency loans would be shortened to 5 years, and the amount of the monthly repayment would be the same. The parts of the loans that wouldn’t be paid back would be gathered on a forint account, and the debtors would have to pay the forint loans back after 5 years. The interest would be a favorable BUBOR+2 percent. Applying this law proposal wouldn’t reduce the monthly payments, but the debtors could get rid of the risks of the exchange rates developing unfavorably this way also. The discussions about the law proposals are still on.
Source:
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