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Central bank to limit personal borrowing

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As of January 1, the Hungarian National Bank (MNB) will enforce a debt cap that prevents consumers from borrowing excessively, MTI, the Hungarian news agency announced today.

Under the new regulations, no one would be able to borrow if they could not prove they have an income. Furthermore, no one taking home less than HUF 400,000 could borrow if their repayments would exceed 50% of their income. Those making more than that amount could not borrow if their repayments would exceed 60% of their income, according to reports.

The regulation would also reportedly put a limit on how much can be borrowed against collateral – so that mortgage loans would have to be based on reasonable collateral.

The central bank announced that the goal of the regulation is not to prevent borrowing, but rather to prevent excessive consumer debt.

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