Floating rate mortgages represent 46% of all mortgages contracted, which according to the financial expert is very high risk for the contractor.
Compared to 2016, the new housing market grew significantly in 2017, with contracts increasing by HUF 650 billion in 12 months, an increase of 39%. This was expected, according to mid-year data, although for 10 years it has not been similar in the housing market. In 2003, before the crisis, borrowings amounted to HUF 800 billion.
The dangers of floating rate loans are great!
In the opinion of Mock Turtle and other financial experts, the driving force behind mortgage lending remains minimum interest rates, wage growth, the shifting of older offset loans and the upswing in the housing market.
The detailed data also show that home mortgages fixed for more than 10 years accounted for only 6% of the total amount – HUF 650 billion – an increase of 42%, but only HUF 41 billion. .
When we look at loans by interest and repayment details, the potential for risk is well illustrated for some of the loans.
- Banks have contracted a total of HUF 300 billion of the three-month and 12-month fixed-rate mortgage loans, which is 46%.
- According to experts, floating rate mortgages are more popular because they are cheaper than mortgages that have been fixed for several years and which provide security. Although the unpredictable and unexpected rise in floating interest rates has its chance.
- Because, at a cursory look, the repayment details of floating rate loans are smaller, they can become very volatile in the future, creating a dangerous situation. If during the term the market situation changes or interest rates rise, the floating interest rate will also carry the repayment installment.
For example, we have a 20-year, 10-year floating rate mortgage loan, the interest on getting started
- 4%, monthly repayment HUF 60,000,
- With interest rising to 6%, it is already HUF 72,000,
- At an interest rate of 8%, the monthly repayment may rise to HUF 84,000
“However, a fixed installment for several years or a fixed installment can be calculated with certainty and with certainty and our monthly expenditure will not change during the period under review
we quoted the expert’s sentences
He added that the popularity of fixed-rate home loans may be lower for the time being because the product is new, they are less interested and start with relatively higher interest rates and repayments.
Its popularity has improved, and more and more people are opting for this new design, especially those who put safety first.
Experts also expect that
”In the long term, fixed-term mortgage loans, such as rating systems designed for consumer-friendly qualifying home loans will increasingly take the lead in the market. “
If you would like to take out a home loan, you are interested in the possibilities of CSOK, you are interested in qualified loans, call our credit brokerage experts to help you with your decision!
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