The Hungarian government’s new Home Start housing program for first-time home buyers officially launched, and already on the first day, CIB Bank announced it would offer mortgages with an interest rate below 3 percent. According to its notice, loan amounts can range between 1 million forints and 50 million forints (approx. €25 hundred to over €126 thousand), with maturities from 5 to 25 years. The fixed rate is 2.95 percent until the end of the term, while the APR for lump-sum disbursed loans is 3.04 percent.
This means the institution is offering home loans at a better rate than that stipulated by the law, which sets the cap at 3 percent. For example, a 50 million forint loan with a 25-year maturity would translate into monthly repayments of 236,871 forints (about €600), about 300 forints (€0.75) less per month than at the standard 3 percent rate.
The customer assessment fee, normally 30,000 forints (€76), is currently being waived by the bank, according to Bankmonitor.
This means the institution is offering home loans at a better rate than that stipulated by the law, which sets the cap at 3 percent. For example, a 50 million forint loan with a 25-year maturity would translate into monthly repayments of 236,871 forints (about €600), about 300 forints (€0.75) less per month than at the standard 3 percent rate.
In addition, CIB Bank is waiving the customer assessment fee and covering the costs of property valuation, land office registration of the mortgage, and Takarnet property record queries
(needed to verify ownership and maps for loan approval and disbursement).
Those applying for both a Home Start loan and a market-rate mortgage may benefit further. Under the “DUO Interest Discount” scheme, a 10-year fixed-rate commercial mortgage would carry a 5.85 percent interest rate.
These offers show that the Home Start scheme, despite being state-subsidized and leaving banks with very slim margins, is quickly becoming a competitive market product.
This morning, Granit Bank also announced it would be offering Home Start mortgages at a favorable 2.85 percent rate, a 200,000-forint (approx. €506) cash rebate, waived fees, and a 10 percent discount on home insurance premiums.
