MNB to roll out ‘consumer-friendly home loan’ certification
The National Bank of Hungary (MNB) on Thursday announced the introduction of a “consumer-friendly home loan” certification to counter high interest margins and the low rate of borrower refinancing, according to Hungarian news agency MTI.
Only banks whose lending products meet strict conditions laid down by the MNB may apply for certification and use the “consumer-friendly home loan” logo.
The introduction of the certification aims to support the proliferation of “favorably-priced home loans that are comparable, transparent and based on a uniform system of conditions”, the central bank said.
The MNB added that it would hold “intensive consultations” with market players and representatives of consumers on finalizing the details of the certification over the next two months.
Deputy governor Márton Nagy complained in an interview in February that home loans in Hungary are far more expensive than in neighboring countries.
The annual percentage rate on home loans has fallen from around 12% in 2012 to 5%-6% at present, parallel with a 610 bps reduction in the base rate, to 0.90%, and an almost 700 bps drop in the Budapest Interbank Offered Rate (BUBOR), to 0.25%. But lending margins have remained unchanged at around 500 bps, that is 200 bps over the average for countries in Central and Eastern Europe, Nagy said.
SUPPORT THE BUDAPEST BUSINESS JOURNAL
Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.