Mortgage

Banking assoc does not support the government’s mortgage rate freeze

Banking assoc does not support the government's mortgage rate freeze
Written by Publishing Team

The Hungarian Banks Association said Thursday that it does not support the government’s temporary freeze on mortgage interest rates.

“The Association of Banks cannot support the temporary freezing of interest rates, at the expense of the Hungarian banking sector, for clients who have decided to take out riskier and floating loans despite numerous warnings to the contrary,” the professional body said.

Prime Minister Viktor Orban announced on Wednesday that the government has decided to freeze interest rates on mortgages, at end-October levels, until the end of June 2022.

The association said it had “surprisedly learned” about the measure on Wednesday.

He noted that Hungarian lenders, in cooperation with the Hungarian National Bank (NBH), have offered in recent years to convert floating rate customers’ credit to fixed rate loans, drawing attention to the benefits of fixed rate loans in public forums and among their clients.

The association noted the “contribution of the banking sector to the defense of epidemics” by paying a sectoral tax and participating in a payment deferral that extends longer than any other country in Europe.

تشاapa Domotor, Parliamentary State Secretary in the Prime Minister’s Office, said Thursday that a government decision to freeze retail mortgage rates until the end of next June could save Hungarian families 30 billion forints (81.3 million euros).

The decision was to freeze for six months from January

The Prime Minister announced it on Wednesday.

Viktor Orban said interest rates on retail loans will be frozen at end-October levels, which means the monthly installment for February will already be lower than the previous ones.

Dumotor He said that about half a million Hungarians have mortgages with variable interest rates.

Without this measure, the accelerated rate increases from October could have added 23 percent, or an average of 11,000 forints, to borrowers’ monthly payments, he said in a video message posted on the government’s Facebook page.

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source: MTI

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