Interest rates have increased drastically in the extraordinary financial market environment that arose as a result of the failed sanctions policy and the sanctioned inflation, so the government must continuously take extraordinary and significant measures to protect families. The financial stability of families must be preserved, and the safety of housing must also be preserved, said Minister of Economic Development Márton Nagy in his announcement on Monday.

Minister of Economic Development Márton Nagy highlighted that the government continues to investigate what means it could use to effectively protect the population in this situation

The government extended the interest rate cap introduced in January 2022 until June 30, 2023, and also decided to extend its scope. Pursuant to this, the interest rate cap already protects non-state subsidized mortgage loan contracts with a fixed loan interest rate in interest periods of up to five years from drastic interest rate increases.

In total, the interest rate cap already protects 350,000 families from having to pay a penalty interest surcharge, of which 284,000 are the number of those already covered by the interest rate cap (they will be affected by the extension), as well as another 66,000 newly affected families (they are subject to the extension) - read the announcement.

According to the government's decision, the sanctioned interest surcharge will remain with the families, which means HUF 80 billion for them in 2022, and will reach more than HUF 60 billion in the first half of 2023. This HUF 140 billion subsidy will therefore remain in the families' pockets. In practice, all of this means that thanks to the interest rate cap, a family will save HUF 282,000 in 2022, and in the first half of 2023, the amount that the government will not have to pay as interest can be reduced to HUF 174,000.

"We can determine that in the first half of 2023, without the institution of the interest rate cap, the repayment installments of an average family would increase by 55 percent," the minister emphasized.

After the termination of the institution of the interest stop, the interest rates will return to the level specified in the contracts. The decision is also beneficial to the financial sector, as defaulted loans would represent a serious risk for all actors.

The government continues to continuously examine the means by which it can most effectively protect the safety of the Hungarian population and the competitiveness of the Hungarian economy. "That's why we defended the utility reduction, that's why we extended the fuel price cap and the food price cap, that's why we're raising pensions, and that's why we launched the support program for energy-intensive SMEs," concluded Márton Nagy.

Source: Magyar Hírlap

Featured image: Hungarian Nation