Interest rates are rising, we can borrow more expensive

The rise in interest rates has begun, as seen in December of last year’s home loans at an additional 4% average interest rate, customers from July 2018 could do the same.

Reasons for rising interest rates:

  1. the majority of the population is looking for and applying for long-term housing loans, which start with higher interest rates,
  2. In bank offers, interest rates started to rise following the rise in the market, resulting in higher credit costs.


Lending and deposit data

Lending and deposit data

“The credit market in Hungary continues to show explosive growth, with peaks in 2008 in several areas of home lending,” we learned from the analyst.

In July 2018, the Hungarian population borrowed HUF 83 billion, which is a 43% increase this year.

The other star product of the household is the personal loan, of which we borrowed HUF 42 billion in July, which is 55% higher than in the previous year.


Personal loans have soared

Personal loans have soared

While housing loans expanded, the stock of loans to households increased by only 2.5%. Free-to-use mortgages fell by 16%, making them only one-third of home mortgages.

Two months ago we borrowed HUF 55 billion more than we repaid. The rise in interest rates on mortgages is the first sign of a start-up process, which also affected APR. According to December data, the average APR for housing loans is 4.3%, now 4.7%. This is 14.3% for personal loans.

The MNB’s announcement explains the rise in interest rates on mortgages with a compositional effect. But that’s not the only reason. There is another factor behind the rise in interest rates:

  • more and more of them are borrowers with lower creditworthiness and higher interest rates. At the same time, interest rates are already rising in several banks’ loan offers.
  • Deposit data are less exciting, with little indication of a rise in interest rates. Despite a very low deposit interest rate, household deposits rose 11.6% over the year.

According to a recent analysis, at the beginning of July, the cheapest fixed-term mortgages for at least 10 years – at HUF 10 million and for 20 years – were well below 5% total APR, meaning a repayment of less than HUF 70,000. . There are also significant differences between these constructions, both in terms of banks and packages, so before borrowing, it is worthwhile to look closely at the multitude of home loans – we learned from the financial analyst.

We would also like to help you with the administration, we can offer different current loan offers without having to visit several banks. We offer free, convenient, fast, reliable administration, and our credit intermediaries are guaranteed to offer such facilities as banks.

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