It is possible to take out a 20-year loan from an average salary of HUF 2.3 million less than last year

The average salary in March 2023 was HUF 577,900 gross, which corresponds to HUF 384,300 net without discounts, and HUF 398,000 with discounts taken into account. Based on KSH data

the net average salary without discounts increased by 16.6 percent, while the calculated with discounts increased by 16.5 percent.

Due to the high inflation rate of 25.2 percent in March, real earnings decreased by 6.9 percent, which means that purchasing power decreased by that much.

How much credit would our salary be enough for?

It is another question, however, how much credit a loan applicant with an average salary would be entitled to now, and how this value has developed in the past period.

From the point of view of the question, changes in average income and interest rates may be important, according to Bankmonitor’s experts.

Not only have incomes increased in the past year, but also loan interest rates:

• In March 2022, the average net income was slightly below HUF 330,000, at which time the cheapest fixed-rate home loan could be obtained with an interest rate of 5.73 percent.
• In March of this year, the annual cost of the cheapest home loan was already 9.09 percent, in addition to the average net income of HUF 384,300.

Unfortunately, the rise in interest rates tipped the balance in just one year: a mortgage loan of HUF 21.2 million for a 20-year term could be applied for at most with the average salary in March.

A year earlier, this would have been enough for HUF 23.5 million.

The good news is that loan costs have been stagnant for some time

In an annual comparison, the situation is still bad, but an improvement can be seen in the recent period. Compared to February, the amount of housing loans available with the average salary increased by HUF 1.7 million.

Credit costs did not increase, but the average income increased from HUF 353,200 to HUF 384,300.

During the calculation, the experts assumed that the bank can charge half of the income – this is the legal limit – but financial institutions can deviate from this in a stricter direction. Also, in the case of a home loan, the value of the property that would serve as collateral for the loan is also an important aspect.