One month later, the change to loans comes into effect, requiring more income for the same amount of loans. It is worth calculating how much credit you will get if you …
One month later, the change to loans comes into effect, requiring more income for the same amount of loans. It is worth calculating how much credit you will get if you plan to take them by then.
Why do they rely more on income?
The main relationship between our verified revenue and the amount of “” credit that can be taken out is that we need a security to repay the installment.
Of course, it may also be possible to extend the maturity period and then make smaller monthly payments. But in this case, overall, borrowing will be more expensive, which is logical as we continue to use bank money.
For years, the National Bank of Hungary has been striving to make loans more secure. The appearance of consumer-friendly home loans was also a sign of this. One of the reasons is that recently a large number of foreign currency lenders were unable to repay the loan.
You do not have to worry if you are not applying for a home loan
The change will primarily affect home loans, including the less secure versions. The tightening applies to home loans with an interest period of less than 10 years. In particular, the terms and conditions of fixed and floating rate instruments with a maturity shorter than 5 years will change.
Even for claimants with higher incomes, the Good Finance is reduced for loans with an interest period of less than 10 years, but the regulation is less stringent than for incomes below HUF 400,000. A person who has a net income of 400,000 or more may be eligible for a higher borrowing rate.
The income above 500 thousand HUF is not overwhelming
According to the regulations of the MNB, those with relatively higher net income may undertake higher loan repayments. This limit will be raised from $ 400,000 to $ 500,000 as of July 1, 2019. This kind of net fix is quite rare. The good news is that borrowers collectively will have enough of their income to reach this level.
For the cheapest loans with an interest period of less than 5 years , a drastic change is expected. Here the current Good Finance will be reduced from 60% to 30% . This means that the total monthly repayment obligation of a household with a net income of $ 400,000 should fall within 30% of their income instead of 60% . If someone does not reach this limit, they can count on 25% .
How much change does it mean? If you paid it off for 20 years, you could still get 44 million forints with this often variable rate version. This will soon change so that people with this income can get a $ 22 million loan.
For the five-year period, the interest rate declines to 40% from 60%, at 10 years remain in the 60%.
Existing credit also counts
It is worth looking into the details, but overall, the lower our income and the more often we focus on floating rate loans that are initially cheaper but more uncertain, the harder the changes will be.
And that’s not all: the banks are counting on the income burden of the loans we have already applied for. 5% of your existing credit line will count toward Good Finance, even if the applicant has not used any forints.