According to the MNB, by November 2018, 95% of the Hungarian population had taken out long-term housing loans! It can be seen that the population is prepared for the possible change in the interest rate environment, while 60% of the old loan disbursements are ticked with floating rate loans, which in case of an interest rate increase can significantly increase the interest and the amount of the installments.
The National Bank of Hungary announced last month that it has issued a housing loan of HUF 71.8 billion, a personal loan of HUF 39.2 billion and other loans of HUF 28.1 billion.
From these figures
we conclude that household borrowing has declined and growth has slowed down. Personal borrowing, on the other hand, increased by 52% in the first 11 months of 2018, while new home loans increased by 33% year-on-year.
From November, the same figure is up 18%.
Housing loan disbursements are similar to 2008, but ten years ago they were HUF 798 billion, last year they were HUF 793 billion in the first 11 months.
According to data released by the MNB, the share of long-term housing loans increased to 63%. This is what the banks have been pushing for, due to the introduction of a consumer-friendly home loan rating in the summer of 2017, a tightening of debt brake rules on October 1, 2018, and other central bank incentives for banks!
It can also be shown that
as a result of the selective tightening of debt brake rules, floating rate loans are likely to be increasingly available to higher income clients!
The average APR on housing loans rose from 4.5% to 5.2%, which is natural at a time of strong credit demand and the spread of fixed-rate housing loans.
Personal loans, on the other hand, are more visible in the interest rate depressing effect of banking competition, and were provided by credit institutions with 13.5% instead of the 14.5% APR a year ago.
The total retail loan portfolio increased moderately by 5.5% over one year, despite the significant dynamics of new loans.
Within this, housing loans grew by almost double-digit, by 9.9% to HUF 3,320 billion.
Retail deposits increased even more
At the end of the year, we held 12.5% more money (HUF 8,664 billion) in the bank than a year earlier. The average interest rate on forint deposits with agreed maturity within one year was 0.22% in November and 0.04% on similar foreign currency deposits.
Companies have taken out almost HUF 1,000 billion more than they paid off in the past year. Two-thirds of net borrowing was HUF 683 billion and one-third HUF 304 billion denominated in foreign currency.
All in all, there are visible signs of an expected rise in interest rates
But for the time being, the slowing down of borrowing is something that is certainly noticeable!
For mortgages, it would be most optimal if the rate of mortgages increased from 5 to 10 years and over 10 years! This would be the safest protection for borrowers against interest rate risk. If our interest rate is fixed for 5 or 10 years, any change cannot affect our credit!
If you would like to take out a home loan, you are interested in CSOK, consumer friendly qualified loans, call our credit brokerage experts to help you make a professional decision!