From 2024, the minimum level of self-reliance when buying a first home may drop from the current minimum of twenty to 10 percent. With the help of the Hungarian National Bank's plan, a young person could get an apartment years earlier. According to a previous study, young home buyers save for ten years on average, so this would be a huge relief for them.
The apartments presented by Híradó will be ready soon and are expected to sell quickly, on the one hand because
the government maximized interest rates on home loans,
on the other hand, because according to the recent decision of the Magyar Nemzeti Bank (MNB), young people are buying their first home
from the current minimum of 20 percent to 10 percent, the mandatory minimum self-sufficiency would decrease from 2024.
The head of department of the MNB spoke about this when he analyzed the situation of the Hungarian economy.
In the case of a property worth 30 million, in terms of taking out a loan, about three million forints less self-reliance is required - explained János Szakács.
According to experts, the central bank's decision is a great help for twenty- and thirty-year-olds, since real estate prices have risen very quickly in recent years, which made it extremely difficult for young people with little savings and low incomes to buy a home. However, this customer base is low-risk, as its income is expected to increase in the future.
By reducing the mandatory self-reliance from 20 to 10 percent, a young person can get an apartment years earlier.
According to a recently published study, young home buyers save for an average of ten years just for their own money.
According to the central bank's expert
the relief may come into effect in the first half of next year.
"Basically, the MNB plans to determine the status of the first home buyer according to the client's declaration and the data available from the real estate register, and in the coming months we will finalize the set of conditions in consultation with the market players," detailed János Szakács.
The central bank would also facilitate loan redemption.
In the current high interest rate environment, it is also extremely important to create the possibility of quick and cost-effective loan redemption, so that customers do not get stuck in high-interest loans. Unfortunately, the ratio of loan redemptions in Hungary is low, only 5–7 percent, one of the reasons for this is the high redemption fee, which can amount to 2–5 percent of the loan debt.
The willingness to take out a loan could be strengthened by reducing prepayment fees, which are high even in the EU comparison, or by digitizing the cooperation of notaries, as well as the complete online administration of mortgage loans.
Source: hirado.hu
The featured image is an illustration. In the photo: Master florist Kinga Untener at the construction of his own investment shop and apartments in Dózsa György Street in Nyíregyháza on June 14, 2017. (MTI Photo: Attila Balázs)
