Abstract:Hungary Mortgage market is a developing one. Mortgage borrowers could access loans either by mortgaging their existing property inside the country or in a foreign country. The terms and conditions for getting mortgage loan is much mild than those accessed by the companies.
Interest only loans are available in Hungary and the borrowers could borrow up to a maximum of 80% of the total value of the mortgaged property. Hungary Mortgage has become more popular with increase in the demand for properties in Hungary.
Now-a-days, financing is not a problem for the buyers of a Hungarian property because of the presence of different types of mortgages offered by all the leading banks in Hungary.
Different forms of financing facility available in Hungary
- In Hungary, property buyers finance the same through the arrangement of a mortgage loan. These loans are given by the numerous banks, including the foreign Banks, present in the country.
- Prospective property buyers can mortgage one of their already existing properties in Hungary for financing a new one.
- Buyers can use their existing property outside Hungary and release equity from it for financing a new Hungarian property.
Advantages of Accessing Mortgage Loan as an individual instead of a companyIndividuals get more mileage than the companies in accessing mortgage loans because of the following reasons:-
- Individuals can get loans at an interest rate much lower than that availed by a company. It has been observed that this interest rate differential is more or less 2%.
- Companies have to repay their loan within a time-frame of 10 years whereas individuals are entitled to get a repayment term of 20 years.
- Individuals are more likely to get credit at easier terms than the companies because in case of the companies the lender banks want a profit history for the same which generally remains absent for the newly formed companies.
- Individuals could access a loan amount of 70 to 80% of the value of the mortgaged property whereas the companies could get hold of a loan of only 50% of the value.
Mortgage Market in Hungary - Some Facts
- Hungary mortgage market is still in the development phase and still to reach the standard of the other European developed countries like Britain, Spain and Ireland. In these developed countries, the borrowers can draw a loan of 100% of the property value whereas in Hungary the borrowers can avail up to a maximum amount of 80% of the value.
- Hungary mortgage is characterized by the presence of interest only mortgages. This interest only period continues for 5 years which then converts to repayment mortgage from the 6th year.