I wrote about the elements of the state home loan rescue program here, and about the changes that have taken place over the past few days.
How many will use this opportunity?
The more accurate question is, is there anyone who wants to stay out of it?
First, briefly on the role of government and banking. Pursuant to this provision, borrowers denominated in foreign currencies may request that their exchange rates be fixed at a rate of HUF 180 for the Swiss franc and HUF 250 for the euro.
The difference between the current exchange rate and the fixed exchange rate is credited to an escrow account, where the principal remains in the debtor’s interest at the prevailing central bank base rate (currently 7%) and is to be repaid after 2017. (The terms of this have not yet been worked out, but it is not expected to be repaid in one installment.)
Banks and the state jointly assume the interest part of the difference.
What is the ratio of capital to interest? Almost all home loans are annuity loans, so most of the monthly repayment at the beginning of the term is still interest-bearing, but only about 30-40% of the monthly repayment is capital repayment. If someone was so lame that he took out a loan in combination with life insurance (how lousy I wrote about it), he may be happy for a while now, as he pays only interest to the bank during the term of the insurance, account.
So, on the one hand, instead of the current HUF 241, we can only cancel HUF 180, the banks and the state take on average 70-80% of the remaining HUF 61.
But what about the rest of the capital? As the central bank base rate is currently 7%, the average interest rate on foreign currency loans is at least as much, and that is not the case.
What to do with the liberating money? Nowadays, here’s another state subsidy: put it in a 4-year-old apartment savings with another 30% state subsidy, and then use the money raised to pay off the capital account at the end of the fourth year.
Since the beginning of last year, we can use the savings of each of our direct relatives’ homes for our own purposes, making sure that the guardianship issue can be included in the children’s contract.
In summary, 70% of the average loan quarter will be paid out for us, the remaining 30% will be below the average bank loan interest rate, and by collecting the money that is liberated in the home savings we will receive another 30% subsidy.