Lending rates will rise because while the five-year and ten-year BIRS reference rates were still at 1.06 per cent and 1.54 per cent at the beginning of January, both had doubled in size by June! This is likely to further increase interest rates on market loans in the next period. As there is rarely such a clearly identifiable turning point in the interest rate market, it is worth paying attention to the changes. Judit Fancsali, the From one to two author of the blog it briefly shows what happened and what we can do to get out of the situation well.
Note: 100 basis points (bp) = 1%
BIRS, that is, of course, not the apple , but the so-called Budapest Interest Rate Swap Reference Rate, shows that if banks want to sell their surplus free funds of a given maturity on the “market” (because they could not or did not want to place them on credit), they will sell them to another bank at what interest rate. . Naturally, a bank in this market offers one day, the next day it demands a particular source. If a bank does not have other sources – parent bank funds, deposits, bonds – then this is the real cost of lending. In addition, you have to ask for a surcharge for, among other things, the administrative management of the loan, bankruptcy risk and profit.
If funding costs rose by more than 1%, what happened to loan interest rates?
Changes in interest rates on loans with interest rates of 5-10 years over time
Larger banks, with the exception of MKB Bank, have raised their lending rates, so individual interest rate options have gradually deteriorated over the past six months. The rate of increase so far has typically been 30 to 40 basis points, but some have already totaled 60 basis points also raised. Meanwhile, UniCredit Bank’s partner individual interest rate stands out more and more positively from the offer of other banks, as the others have more or less followed the change in the market.
Why is it worth taking a loan at a low point, triggering a loan?
This means that banks in the coming periods compared to before loans will be more expensive, which can hurt borrowers.
On the one hand, everyone likes to have the lowest interest rate loan. On the other hand, the principle of interest rate change is fixed, so if the term is longer than interest rate security – for example, we do not take out a loan with a fixed interest rate, but with a one-year, five-year, ten-year, etc. interest rate period, ie the interest rate will change after the end of the interest period – then at the time of the interest rate reversal it will be a very low premium loan with favorable terms compared to other credit facilities, as the bank margin cannot increase in the future either.
How can you be sure that your loan will no longer become more expensive due to the interest rate hike?
For example, in the case of consumer-friendly credit, after the contract of sale at the time of acceptance the interest rate is fixed, and for most banks, it can take half or even a year for disbursement if the borrower’s goal is to do so.
Construction loan typically 15 days after the submission of permits / plans to the authority, as expected by most banks can be requested after opening an e-log, in the case of most banks, the interest rate is fixed here when submitting the entire loan material.
In the case of a loan redemption, when someone decides to fix a variable-rate loan, such as the interest rate on a home loan with a revaluation rate within one year, for a longer period, such as a five-year or ten-year loan, or a full-term after submission by the bank fixed by inclusion. For this, there are banks where, in the case of a loan not covered by a moratorium, a debt certificate is not required in the first place.
Why do people find it so difficult to trigger their loans?
Credit redemption, on the other hand cumbersome process, on the one hand, because it involves even more administrative work than borrowing (even if a credit intermediary helps you), and on the other hand, because there may be a number of fees at the current bank: for example, a final repayment fee, the initial bank start-up costs, or old bank reclaims the initial waived costs.
In addition, they come into the picture a personal and subjective factors is. In many cases, the borrower’s life situation changes, he or she changes his or her property, inherits, or takes out another loan, so in many cases, by the time it is “worthwhile” to trigger due to a change in the interest rate environment, it is no longer relevant.
In addition, for a significant proportion of people, there is a general feeling of bad credit, as there may have been a number of costs to such a maneuver in the past, which has since been heavily regulated, but the feeling associated with it has remained. Also, mentally easier anyway than usual, it’s not even the best way to stay in construction than to change.
What does a more favorable loan interest rate mean per month?
However, it’s worth keeping in mind that staying comes at a price, and that cost can be expressed very simply in numbers:
An interest rate differential of 100 basis points means HUF 60-72 thousand per 10 million per year.
Therefore, it may be worthwhile to negotiate, queue up, or obtain the paperwork needed to redeem the loan or otherwise change the interest rate at the bank. But even that can be saved with a credit intermediary who can not only be a huge support to see the subsidies, but can also help you find the best loan interest rate. All this for free. So, if you feel you need help, contact our expert, Judit Fancsali, for From one to two blog author.
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Source: Ingatlanhírek by ingatlanhirek.hu.
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