Fixed-rate home loans are on the rise
As expected, the Hungarian mortgage market continued to grow. In the first quarter, banks signed new home loan agreements amounting to HUF 169.2 billion, an increase of 35 percent compared to the same period of the previous year. During the period in question, the market was clearly driven by long-term, fixed repayment mortgages, according to Wealthy Plus Bank’s own data and the latest official central bank numbers.
Quite a surplus on fixed repayment loans
Neneth Truncko, an expert at Wealthy Plus Bank, said: “In our experience, so-called floating rate mortgages have been declining for months, and their interest rate may change within 3-12 months, which will also change the repayment installment. More and more people are demanding fixed-term mortgages that are predictable for several years . ”
In the first quarter, 70 per cent of new home loans were fixed-term mortgages for more than 1 year , amounting to more than HUF 120 billion. “The amount of new contracts on fixed-term mortgages for 1-5 years increased by 70 percent, and for those aged 5-10, 44 percent,” the expert said. He added that the popularity of fixed-term mortgages for more than a year is already reflected in the fact that new mortgages had a 76 percent share in March, which is above the first quarter average. In other words, in March almost every eighth new home loan had a fixed repayment for more than 1 year.
How much they cost?
Compiling Wealthy Plus Bank also reveals that at the beginning of May, the cheapest mortgages with a 10-year, 20-year mortgage with a fixed repayment term of at least 5 years were offered with a full APR , which is less than HUF 60,000 a month. It means.
However, the most expensive constructions can cost 65-70 thousand HUF. Banks are increasingly competing in the increasingly popular multi-year home loan market , so conditions often change, so it is worthwhile for loan applicants to look closely at the supply , as a cheaper home loan can save millions.
What will happen?
Neneth Truncko, telling Wealthy Plus Bank’s forecast, said that competition between banks for home lending could continue in the next period. In addition, the central bank has indicated that it would like to see an increase in lending with lower lending rates, so that the housing loan segment may remain steep in the future.