Home Loans in the Age of Interest Rates
The era of rising interest rates in June 2018 has clearly begun. The recent rise in interbank interest rates is also having an impact on home loans. What do the experts say?
Changing home loans
The last few years have been characterized by stable and very deep interest rates – and APRs. However, from May to June (except for four banks) lending rates increased everywhere. The upward trend is affecting offers with 5 and 10 year credit periods.
The banks are constantly following the reference yields published by the National Debt Management Center. This will make it more profitable for them to lend to the public. The change means that home loans with an incredibly low down payment that service providers have been able to afford will soon disappear from the market.
In June, banks had already touched on interest rates
There are financial institutions where home loans have not yet been adjusted to changing values, since better deals attract more people, but the adjustment – that is, raising interest rates – is not far behind.
The current situation is that some banks, such as Good Pocket, raised interest rates by 20-30 basis points in June. UniCredit did not reach the 10-year offer, but raised the interest on a 5-year home loan. The largest increase in the market occurred in June at one financial institution, from 4.98% to 5.62% .
Interest in Qualified Consumer Friendly Home Loans will surely increase. In fact, there should be no negative change from a consumer perspective. So far, not too many have moved, but if the market becomes more uncertain, more will change for sure. If you are looking for stability, you may not need to pick up an MFL, but it is worthwhile to use fixed versions throughout.
Much can depend on the credit you make
The terms and conditions of the loans may also vary depending on whether or not the committed income is credited . This means that the amount fixed in the contract will be credited to the bank’s bank account, for example, if the client transfers HUF 400 thousand a month. This is a bit of a risky undertaking, as we cannot guarantee that we will be working in the same place in ten years – but it can make our loan conditions extremely favorable and, if so, protect us from rising interest rates.