Mortgages in Hungary
The mortgage approval process in Hungary typically takes 1 to 3 months1. This duration can vary depending on factors such as the completeness of your documentation and the specific bank’s procedures.
Hungarian banks are required by law to present a Total Credit Fee Index (THM) to the applicant before granting a loan. The Total Credit Fee Index shows the full amount of money the debtor will have to pay back, including all interests and collateral costs. Another recent development in Hungary is the increased state intervention in the financial institutions’ lending practises. Ever since the Hungarian Forint’s exchange rate started to fall dramatically compared to Swiss Franc and Euro, leaving indebted those who have mortgages in foreign currency, the government installed laws obligating the banks to review the terms of repayment and to accept a state determined fixed interest rate. There is a pending moratorium which prohibits the financial institutions to repossess the properties of insolvent debtors. As the banks try to realise the income lost because these measures, this chain of events resulted in higher Total Credit Fees Indexes. Foreign citizens are strongly advised to check the Total Credit Fees Index. The interest rates may be tempting in Hungary, especially if the loan is CHF or EUR based but some banks raised significantly their administrative costs, resulting in Total Credit Fee Indexes up to 40%, meanwhile there are still mortgages available with Total Credit Fee Indexes of 25% - 32%.
Hungarian banks are required by law to present a Total Credit Fee Index (THM) to the applicant before granting a loan. The Total Credit Fee Index shows the full amount of money the debtor will have to pay back, including all interests and collateral costs. Another recent development in Hungary is the increased state intervention in the financial institutions’ lending practises. Ever since the Hungarian Forint’s exchange rate started to fall dramatically compared to Swiss Franc and Euro, leaving indebted those who have mortgages in foreign currency, the government installed laws obligating the banks to review the terms of repayment and to accept a state determined fixed interest rate. There is a pending moratorium which prohibits the financial institutions to repossess the properties of insolvent debtors. As the banks try to realise the income lost because these measures, this chain of events resulted in higher Total Credit Fees Indexes. Foreign citizens are strongly advised to check the Total Credit Fees Index. The interest rates may be tempting in Hungary, especially if the loan is CHF or EUR based but some banks raised significantly their administrative costs, resulting in Total Credit Fee Indexes up to 40%, meanwhile there are still mortgages available with Total Credit Fee Indexes of 25% - 32%.
