Published: November 29 2023
Getting a mortgage loan of up to 100-150 million forints in Budapest is becoming more common as the prices of houses and newly built apartments increase. However, it is important to properly prepare for the transaction to increase the chances of success, and a mortgage expert can be of great help in this process.
Considerations for large mortgage loans
When applying for a large mortgage loan, it is crucial to have a high income, as the Debt-to-Income (DTI) ratio determines the maximum amount that can be allocated for loan repayment. To obtain a loan of 100 million forints, for example, a monthly income of 1.4-2 million forints may be required. Additionally, the available banks for large mortgage loans may be limited, with fewer options compared to smaller loan amounts.
Key factors: Income and down payment
Two critical factors considered by mortgage experts are income and down payment. Non-salaried income, such as dividends, rental income, foreign income, and entrepreneur income, are treated differently by banks and may affect the approved loan amount. The minimum down payment required by banks is typically 20% for a 100 million forint loan and 30 million for a 150 million forint loan. It is also important to note that banks may be more cautious with loan-to-value ratios above 75%.
Babaváró loan as a down payment option
The Babaváró loan can help in generating the required down payment, but it is only available for couples planning to have a child who meet the eligibility criteria. If the Babaváró loan is applied for alongside the mortgage, 75% of its amount can be considered as a down payment, potentially fulfilling a significant portion of the required down payment.
Combining large mortgage loans with CSOK Plus
For individuals planning to combine a market-based mortgage loan with the government-supported CSOK Plus loan in 2021, it is not necessary to involve additional co-borrowers, including close relatives. The loan amount is determined based on the number of existing and planned children, with specific amounts allocated for each child. This provides flexibility for borrowers who do not wish to involve additional co-borrowers in their mortgage loan.
With the increasing demand for larger mortgage loans in Budapest, understanding the key factors and proper preparation can increase the chances of successfully securing the desired loan amount. It is important to research and consult with mortgage experts to make informed decisions regarding income requirements, down payments, and available loan options.
Questions & Answers
How much can I borrow for a mortgage loan in Budapest? You can borrow up to 100-150 million Hungarian forints for a mortgage loan in Budapest.
Are there properties in Budapest that are priced at over 100 million forints? Yes, there are over 10,000 properties in Budapest that have a minimum price of at least 100 million forints. There are also more than 6,000 properties with a price of over 150 million forints.
Are there properties in other cities in Hungary that are priced at over 100 million forints? Yes, in the four largest cities in Hungary (Debrecen, Szeged, Miskolc, Pécs), there are over 1,800 properties priced over 100 million forints. Among them, 800 properties have a price of over 150 million forints.
What is the monthly repayment for a 100 million forint mortgage loan in Budapest? For a 100 million forint loan with a fixed interest rate and a term of 20 years, the monthly repayment starts at 825,000 forints. However, depending on the bank's requirements, you may need to show a monthly income of 1.4-2 million forints.
How many banks offer mortgage loans of 100 million forints in Budapest? According to Bankmonitor, there are only 3 banks that offer mortgage loans of 100 million forints in Budapest. For loans of 150 million forints, there are only 2 banks that offer loans with a 10-year interest period.
What are the critical factors for obtaining a large mortgage loan in Budapest? According to Bankmonitor experts, the critical factors are income and equity. Banks have different treatments for various sources of income, such as dividends, rental income, foreign income, and entrepreneurial income. Having a sufficient income is important for obtaining a large mortgage loan. Additionally, banks usually lend up to 80% of the property's market value, so a minimum equity contribution of 20% is required for a 100 million forint loan and 30 million forints for a 150 million forint loan.
Can the Babaváró loan help with the equity requirement for a mortgage loan in Budapest? Yes, if you are a couple planning to have children and meet the conditions for the Babaváró loan, you can use 75% of the Babaváró loan amount as equity and 25% as an existing loan when applying for a mortgage loan. The Babaváró loan can help in providing a part of the required equity.
Can I combine a large mortgage loan with CSOK Plus in Budapest? Yes, if you plan to combine a market-based mortgage loan with the CSOK Plus loan for having children, you don't need to involve additional co-borrowers, even close relatives. The number of existing and planned children is considered when determining the loan amount.