We can see that mortgage loans are getting cheaper thanks to central bank interest rate cuts. But it’s not just because it’s easier to get a loan. Banks have finally begun to relax under tight conditions. But they are still tougher than before the crisis.
Banks have significantly eased their credit assessment conditions by nearly 40 percent in recent years, according to the central bank. According to the institution, this is still considered to be strict, but more and more people are getting credit if they try.
Prior to the crisis
Banks typically provided 60-65 percent of the value of homes purchased from loans, while in 2012, they were already asking for 50 percent of their own funds on average. This year, the bridging ratio of new home loans is starting to climb to close to 60 percent. According to central bank data, 57 percent of the value of your home can be safely asked by an average customer.
There will be no substantial restriction next year
The above data also show why the tightening of the MNB introduced next year will not have a significant impact. In fact, the organization is introducing new restrictions to prevent over-indebtedness. We regularly report on ongoing promotions to give you an idea of the discount options banks are offering. One is the income proportional installment indicator, which measures disposable income relative to the installment installment. This ratio may not exceed 50%, and 60% for high income clients (net income of HUF 400,000 or more).
Another limit will be the maximum loan-to-value ratio, which in the case of retail loans will maximize the loan amount to 80 percent of the value of the home. Central bank data show that banks have provided such a small amount of credit so far, so it will not have much effect.