Government official: Freezing personal mortgage interest rates could save households HUF 30 billion
The decision on the six-month freeze from January was announced by the prime minister on Wednesday. Personal mortgage interest rates will be frozen at their end-October levels, which means February’s monthly payment will already be lower than previous ones, Viktor Orbán said.
Domotor said about half a million Hungarians have variable rate mortgages. Without the measure, the accelerated rate hikes from October could have added 23%, or 11,000 forints on average, to borrowers’ monthly payments, he said in a video message posted on the government’s Facebook site.
The Hungarian Banking Association said on Thursday it did not support a temporary government freeze on mortgage interest rates.
“The Banking Association cannot support the temporary freeze of interest rates, to the detriment of the Hungarian banking sector, for customers who have decided to take out riskier variable rate loans despite several warnings to the contrary,” said the professional body.
Prime Minister Viktor Orban announced on Wednesday that the government had decided to freeze interest rates on mortgages at end-October levels until the end of June 2022.
The association said it “learned with surprise” of the measure on Wednesday.
He noted that Hungarian lenders, in cooperation with the National Bank of Hungary (NBH), have proposed in recent years to convert customers’ variable-rate loans into fixed-rate loans, drawing attention to the benefits of low-cost loans. fixed rate in public forums and among their clients.
The association underlined the “contribution of the banking sector to the defense against the pandemic” in the form of the payment of a sector tax and the participation in a repayment moratorium which extended over a period longer than any other in Europe.