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Details on forex mortgage relief plans

In Hungary

The latest on the forex-based mortgage loan relief plan negotiations between the central government and banking interests, courtesy news service MTI: Two proposals submitted on August 27 for such a bailout involved either converting all mortgage loans based in foreign currency to forints either all at once or over a period of five years. 

Not much in the way of further detail was given; MTI sources an August letter from the Hungarian Banking Association (MBSz) to National Economy Minister Mihály Varga. Ministry representatives told MTI that “part of the proposals made by the association were unacceptable” and that both proposals are still under review.

MTI describes the five-year conversion plan proposed as “shortened to five years, but borrowers would still pay the same installments they would under the original term of the loan. The difference between the amount paid and the amount owed at the end of the five-year period would be placed on a separate, forint account that the borrower would pay later, over a period of 5, 10, 15 or 20 years…”

In August, National Economy Ministry State Secretary Gábor Orbán stated that any forex-based mortgage loan debtors would be “required to make use of the relief package being drawn up,” though some special exceptions could be made.

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