Borrowings have risen to an unprecedented height this year in Hungary. In May, the borrowing peak hit a certain type of loan. But which one, and what loans are the most popular in Hungary now?
Two types of loans dominate the domestic credit market: they do not know the primacy of home loans and personal loans. Many talk about their new flowering, not without reason.
Banks placed HUF 76 billion in housing loans and HUF 45 billion in personal loans in May this year, and the total value of all other loans was just over HUF 30 billion, according to the MNB’s domestic credit and deposit market data.
The most popular credit order now looks like this:
- housing loans;
- personal credit;
- consumer credit;
- car loans;
- free-use mortgage.
The popularity of home loans is not even more evident, as the MNB’s statistics released at the beginning of July showed a home loan peak in May. A similar value has been registered twice this month since the change of regime: in 2003 and 2008, but both now surpass (HUF 75 billion in May 2003 and HUF 69 billion in May 2008 for housing purchases).
Fixed interest rates are increasingly popular among home loans. The differences between fixed or floating-rate loans have been discussed earlier , but only the latter typically have slightly higher interest rates, while the latter are lower, but only initially, as they may even grow significantly over the life of the loan. In April, 81 per cent of all housing loans were fixed with a fixed interest rate of over one year – most of which were fixed for 5 years – but the proportion of loans with interest rates over 5 years is increasing.
The uptake of personal loans also exceeded the growth rate of home loans, although the amount raised was still significantly lower than the latter.
The steady increase in borrowing interest is greatly facilitated by the very low level of forint interest and the associated low level of interest rates on loans and the digitalisation that simplifies and facilitates the recruitment of personal loans.
At the same time, according to MNB data, interest rates on home loans started to rise to a minimal level in January this year, albeit by only 0.05 percent, but at the beginning of July, the World Economy said that interest rates on fixed-rate loans also began to rise at several banks. For example, OTP has an increase of about 30 basis points, while Oberbank has a growth of around 0.6 percentage points, but Sberbank, Takarék Commercial Bank, Erstel, MKB, Budapest Bank and CIB have raised.
According to experts, an additional rise can be expected, so it is not at all devilish to think about picking up a home loan now. Who you want to pick up and what loan to use, you can easily decide with the Credit Separator .