Why the "Home Start" Program Is Beneficial – Key Details Revealed

Following the announcement of the Home Start (Otthon Start) program, interest has surged, marking the beginning of a revival in the Hungarian housing market and construction industry, Miklos Panyi, Parliamentary and Strategic State Secretary of the Prime Minister’s Office, told Magyar Nemzet in an interview. He emphasized that the program will be available without age restrictions, with special support for families and those planning to have children. According to the State Secretary, this initiative fits seamlessly into the government’s philosophy of building a civic Hungary, which focuses on expanding and strengthening the middle class.

Illusztráció Forrás: Kallus György

What life situations does Home Start address?
As mentioned, the program primarily targets young people, but not exclusively. Many young adults today are stuck either at their parents’ home or in rental housing due to high purchase prices and interest rates. Renting is problematic because it tends to delay family formation and childbearing. Furthermore, the dependent lifestyle doesn't support the civic mindset essential to a solid society — which is based on ownership and personal responsibility.

That’s why Home Start is also a program for civic development and middle-class expansion.

With this support, tens or even hundreds of thousands of drifting, renting young adults searching for purpose can become responsible, committed and confident homeowners.

How does this align with the government’s philosophy?
This program is not just a solution to social and economic issues — it is part of the government’s broader vision for a civic Hungary, aimed at expanding the middle class. It aligns with efforts to create a million new jobs and establish a work-based society. Today, one million more people work in Hungary than in 2010. The number of people living in poverty has dropped by a third — also about a million people. These are historic achievements not reached through welfare programs but through jobs, a work-supportive tax system, and the diligence of the Hungarian people.

We’re continuing to build the middle class — not through rental housing programs that foster dependency, but through the first homeownership opportunity like Home Start.

This is how Home Start fits into the grander program for developing the country.

The government continues to build the middle class (Photo: Sandor Csudai)

What are the conditions for taking out a Home Start loan?
The loan, available with a fixed 3% interest rate for up to 25 years, requires: a clean criminal record, no outstanding public debts, valid social insurance status, and the banks call for proof of independent earning capability. Applicants must not currently own or have owned residentially zoned property in the past ten years. This is particularly relevant for former foreign currency loan holders who lost their homes — a group we specifically aimed to support. There are two more key exceptions: Those owning a property worth under 15 million HUF (approx. €38,000) — e.g., inherited — may still qualify. Those who own up to 50% of a property (co-ownership cases) are also eligible if they cannot use or sell their share of a property.

What are your expectations regarding the impact of the program?

We assessed the housing market before designing the program and set: a 1.5 million HUF (about €3,750) per square meter price cap,  100 million HUF (about 250 thousand euros) cap for apartments, and 150 million HUF (375 thousand euros) for family homes. These limits send strong signals to sellers, developers and the market — primarily concerning price stability.

We expect the construction of at least 50,000 more homes over the next five years than would have been built otherwise.

Construction industry players are even more optimistic. We want to kickstart projects that were postponed in recent years. This benefits first-time buyers, the industry and the entire country.

How much will it boost the economy and real estate market?
Building 10,000 new homes adds about 1% to GDP. So, 50,000 homes would represent around 4,500 billion HUF (about 11.5 billion euros) in investments. This surge will generate a stable order backlog for construction companies and create tens of thousands of new jobs. Many people will build their own homes — good news for small and medium-sized contractors. Big developers also see major opportunities.

This growth will benefit the state budget, making the program financially sustainable in the long run.

It will also mobilize unsold properties that owners have long wanted to upgrade from, triggering transactions in higher price brackets — a “multiplier effect” across the property market.

How have banks responded to the program?
We held multiple discussions with the financial sector. Banks welcomed the stimulus and expect tens of thousands of new clients. They’re motivated to participate and to offer attractive deals for young borrowers to retain them long-term. We expect strong competition among banks and have introduced measures to streamline the application process. Compared to previous programs, the paperwork burden will be lighter. We're still fine-tuning a few details, but we're on track.

By September 1, banks will be fully prepared. No one wants to miss out on this opportunity.

The favorable conditions of the Home Start program bring the first home within reach for hundreds of thousands of young people (Photo: Sandor Csudai)

How does the program support first-time homebuyers?
Home Start helps in four key ways: First the fixed 3% interest for 25 years ensures predictability. Monthly payments won’t change, and there's no exchange rate risk. Second, this amounts to significant monthly savings for the buyer thanks to the subsidized rate: 

for example, at market rates a 20 million HUF (€50,000) loan over 25 years is a mortgage payment of about 155,000 HUF(€375) per month, while at 3% it is about 95,000 HUF (€238) per month. That’s 60,000 HUF saved monthly, or 720,000 HUF (€1,800) in support per year.

Third, the program makes possible a higher borrowing capacity relative to income level. A borrower who previously qualified for a 20–25 million HUF (€50,000-63,000) loan can now opt to access to 35–40 million HUF (€88,000-100,000), allowing the purchase of homes 15–25 sqm larger. The fourth key point is the low 10% down payment requirement. 

For a 35 million HUF (€88,000 apartment, only 3.5 million HUF (€8,800) is needed upfront which will greatly help young people attain home ownership.

With this program, a half-year’s rent for a small apartment in a Western European city could cover the down payment for a first home in Hungary. And the monthly installments could even be less than the typical cost of renting, while the buyer builds equity. and lives in his or her own place.

Are you concerned about subsequent rising housing prices?
We’ve designed safeguards into the program because demand is already very high. Price caps ensure properties above 1.5 million HUF (€3,700) per sqm are excluded. With already high market prices, homes priced at or near this limit can’t be marked up. And lower-quality homes can’t be bumped up into the program due to competition from better properties.

New build price limits will influence the used home market too: above a certain price, young people will prefer new builds.

These mechanisms will stabilize property prices. Many homes priced just above the cap will have to lower their prices. Additionally, we expect 20,000–25,000 new homes to start construction in the next six months, and similar figures next year. These limiting factors and supply growth will provide years of predictability for the housing market and prices. Come September, a new chapter begins in Hungary’s housing market. We encourage everyone to seize this opportunity!

Cover photo: Through the Home Start program the Hungarian government is providing massive support to families and those planning to have children (Photo: Gyorgy Kallus)