Property Purchase Costs | Mortgage Finance

Introduction:

Mortgages in Hungary are typically taken out in Swiss Francs, but there are mortgages in Forints and other currencies available. Interest rates on Swiss Franc mortgages have tended to be cheaper than for other currencies in the past few years.

The typical loan-to-value (LTV) is 70% for resale property and 80% for new-build, though there are 100% mortgages on offer in some circumstances. In general, loans are cheaper to individuals than they are to limited companies (see Forms of ownership) and can be paid back over longer periods e.g. 20 years for individuals compared with 10 years for companies.

The mortgage fee is typically 1% of the mortgage amount, payable on completion, and an additional 1% each year, which will be added to the interest rate. Lenders require proof of income in all cases. There are some self-certification mortgage products available to buyers in Hungary.

Mortgages for individuals

The typical limitations for mortgages to individuals for property in Hungary are as follows:

What is covered?

Purchase of houses, apartments and freehold land are available for individuals.

Type of loans available

Capital repayment mortgage
Interest-only mortgages available for 3 or 5 years.

Maximum LTV (loan-to-value ratio)

New-build and off-plan – 70% to 80% (depending on the development)
Re-sale – 70%
Self-certification – 50%
Re-mortgage – 60%

100% mortgage products are sometimes available in the Hungarian market.

Maximum loan amount

€500,000 (£400,000) or equivalent in other currency

Interest rates

Rates vary but typically, Euro mortgages are at a lower rate than Forint mortgages and Swiss Franc mortgages (by far the most popular mortgage currency in Hungary) are at a lower rate than Euro mortgages.

Maximum term and age limit

20 years maximum term (and not more than 68 years old at maturity)

Currencies available

Forint, Euro, Swiss franc, US Dollar

Mortgages for companies

Hungarian companies can get limited finance subject to the following conditions:

The company has been trading for at least one year.
The company has complete balances signed by an auditor.
The company has a proof of income.
The loan will not exceed 50% of the LTV for a maximum period of 10 years.

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