Home loan in early 2021 is incredibly cheap. This is well illustrated by the fact that the interest rate on the most popular loan with a 10-year interest period decreased by almost 1 percentage point in two years, which is why a total of HUF 1.8 million less has to be repaid on a HUF 15 million loan. However, there are several indications that this very favorable situation may change soon.
“It has never been so cheap home loan we can hear for years. There is also a truth in this, the interest rate on home loans is constantly setting negative records, which is very favorable for home buyers. Currently, the price of loans has reached another level: it is already available at interest rates below 3 percent for 10 years interest period home loan in our country. (The interest period is the period during which the bank cannot unilaterally change the interest rate on the loan.)
Interest rates on the most popular home loans fell by one percentage point in 2 years
Since February 2019, the interest rate on 5- and 10-year home loans has decreased by 1 percentage point, while the interest rate on a 20-year fixed-rate loan has decreased by 1.4 percentage points.
The 0.97 percentage point decrease in interest rates for a HUF 15 million home loan with a 10-year interest period and a 20-year maturity means that we have to repay HUF 7,600 less per month, which is a total financial advantage of HUF 1.8 million compared to what we claimed two years ago. would have the loan.
How long will low interest rates stay with us?
This depends primarily on how well it is worth for banks to offer such cheap credit. In the recent period, it can be considered as an interest expense for banks BIRS – the level of interest rates at which financial institutions are willing to lend to each other for a given maturity – and government bond yields have both declined. However, the data of the last weeks and months show a change.
It is worthwhile to deal in detail with the most popular home loan with a 10-year interest period and the indicator that best describes the associated interest cost, the 10-year BIRS. Over the past two years, the average difference between these values - this can be seen as the bank’s profit – has been in a narrow range of 1.9-2.2 percent. Of this, the indicator once hung out, namely in August 2019, but it was followed by a significant decline in lending rates.
Currently, the difference is much smaller, 1.44%. And this could be a warning sign that credit costs could rise in the near future. In addition, the BIRS index has risen further in recent days, reaching 2.10% on 16 February. That is, the 10-year BIRS is currently even higher than the average shown in the figure, so a 0.5 percentage point increase in interest rates in the coming period is not at all unthinkable. This would result in an increase of HUF 3,800 in the case of a HUF 15 million 20-year housing loan.
Of course, other alternatives are conceivable, the value of the BIRS indicator may even decrease due to market developments or the intervention of the central bank. However, it is certain that if the BIRS indicator remains at such a high level, banks will raise lending rates in the near future.
You can compare the currently available home loan offers with the Bankmonitor calculator in a matter of seconds:
Source: Ingatlanhírek by ingatlanhirek.hu.
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