Published: November 27 2023
Considering buying a property in Hungary and taking out a mortgage? In this blog post, we will discuss the monthly payments for an 18 million HUF mortgage after the recent interest rate cut. We will explore the options and factors to consider when calculating your mortgage payments.
Advantages of Buying a Property for Investment Purposes
Buying a property for investment purposes, such as renting it out, can yield stable income for the owner. With the recent increase in rental prices, the annual rental yield for investment properties has also risen. This makes purchasing a property for investment purposes an attractive option for those looking for long-term returns.
Demand for Rental Properties and Rental Yield
The demand for rental properties has been increasing, resulting in higher rental prices. The National Bank of Hungary's report states that rental prices have increased by 14-15% nationwide and in Budapest during the past year. This rise in rental prices has led to a higher rental yield for investment properties. Therefore, investing in properties for rental purposes can provide a steady source of income.
Calculating Monthly Payments for an 18 Million HUF Mortgage
If you are considering purchasing a property with a price of around 38 million HUF and have a 20 million HUF down payment, you will need to take out an 18 million HUF mortgage. The bank will require a minimum monthly net income of 400,000 HUF to verify your ability to make the mortgage payments. It is more comfortable to pay the monthly installments if you have a net income of 500,000 HUF, either individually or with a co-borrower.
Current Mortgage Options and Interest Rates
Currently, the Bank360.hu mortgage calculator offers mortgage options for 18 million HUF with a 15-year term. With a monthly income of 400,000 HUF, the total cost of the loan, expressed as the Total Interest Rate (THM), ranges between 7.5% and 8.46%. With a monthly income of 500,000 HUF, the THM range is similar, between 7.5% and 8.42%. The difference between the lowest and highest monthly installments is 9,000 HUF, with a total repayment difference of 1.6 million HUF.
With the recent interest rate cut and the competitive market, mortgage options in Hungary have become more favorable. The attractive interest rates and increased rental yields make investing in property for rental purposes an appealing choice. By considering your financial situation and the available options, you can make informed decisions about taking out an 18 million HUF mortgage and calculating your monthly payments.
Questions & Answers
=== What is the advantage of purchasing a property in Hungary using a mortgage? Purchasing a property in Hungary using a mortgage can be beneficial for long-term planning and investment purposes, such as securing housing for future generations. Renting out the property can provide a stable source of income for the owner.
How has the rental yield in Hungary changed recently? The rental yield for investment properties has increased due to the rising rental prices. While property prices have slowed down in recent years, rental prices have continued to rise, leading to higher rental yields.
Who can participate in the 2022 Census in Hungary? Every long-term resident of Hungary, both Hungarian citizens and foreign nationals, who have been living in Hungary for at least 3 months as of 1 October 2022.
How often does the census take place in Hungary? The census takes place every ten years since 1870.
How has the rental market in Budapest and Hungary been affected by the increase in rental prices? The rental prices in Budapest and nationwide have increased by 14-15% in the past year, parallel to the slowing growth and stagnation of property prices. This has led to higher rental yields for investment properties.
What is the current rental yield in Budapest? Previously, the average gross rental yield in Budapest was 6.5%, but it has increased to 7% for properties rented out for a year.
What are the current mortgage interest rates in Hungary? As per the current offers from various banks, the mortgage interest rates range from 7.5% to 8.46% with a net monthly income of HUF 400,000 and from 7.5% to 8.42% with a net monthly income of HUF 500,000 for an HUF 18 million mortgage with a 15-year term.
What are the income requirements for obtaining a mortgage in Hungary? To qualify for a mortgage, banks typically require a minimum net monthly income of HUF 400,000, but having a joint net income of HUF 500,000 with a co-debtor can make it easier to meet the monthly repayment obligations.
Which bank offers the most favorable mortgage terms for an HUF 18 million loan in Hungary? Currently, the bank "Gránit" offers the most favorable terms for an HUF 18 million loan with a 15-year term, with a lowest THM (total loan cost ratio) of 7.5%. Other banks, such as MagNet, MBH, and CIB, offer mortgage rates below 8%, while Raiffeisen offers a slightly higher rate of 8.08%.
Can existing mortgages be refinanced in Hungary with lower interest rates? If there is a decrease in interest rates, it is possible to refinance an existing mortgage with a new loan that offers a lower interest rate. The decision to decrease interest rates is influenced by the central bank, and such decreases also affect the interbank interest rates used for housing loans.
How much will the monthly repayment be for an HUF 18 million mortgage with a 15-year term? With the current rates offered by banks, the monthly repayment for an HUF 18 million mortgage with a 15-year term will be approximately HUF 164,205, which amounts to a total repayment of HUF 29,569,500 over the loan term. ===