In 2017, the Hungarian population borrowed at a record level, and this trend is likely to continue this year. Home loan terms are still very favorable due to the persistently low interest rate environment. Let’s see some important information that may interest borrowers.
Short-term loans have interest rates well below 3%
If we undertake to review our repayment installments every 3, 6 or 12 months and adjust them to the current BUBOR level, that is, they may or may not decrease (at this point in time), we will get a mortgage with a APR of 2-3 percent.
However, a typical 10 or 20 year maturity has a lot of potential for change and initial cheap credit can change unpredictably.
That is, we can get a $ 12.5 million loan with a monthly payment of $ 50,000, and many people take advantage of the opportunity, but not a bad word if they have to pay $ 100,000 in 5 years. Experts continue to prefer more expensive but more stable loans.
Long-term mortgage loans have very favorable interest rates
It is worth taking such a loan as it is now available under fantastic conditions. The advent of consumer-friendly home loans has also prompted banks to improve their offer, which changes every 5, 10 years or fixed.
With a 3 year interest rate period, the best deal is achieved with a APR of 3.11%, if after 10 years our installer moves, which is a reasonably high security, we have to calculate an APR of 4.5%.
Security costs money, but for years it hasn’t been as cheap as it is now: for 20 years, fixed-rate deals actually add about $ 20-25,000 a month to the three-year variable, according to analysts. (Looking at early 2018 bids with an average family income of $ 100,000).
The most stable have moved in the right direction
Fixed-rate loans have typically become slightly more favorable compared to previous months. On average, there is a 0.5-2% drop in THMs.
Notwithstanding the promise made by the Vice President of the MNB in the autumn of 2017 that we can expect favorable low interest rates for years to come.