120,000 borrowers seen paying off mortgage under govt scheme

About 120,000 people will elect by the December 30 deadline to participate in the government’s plan allowing borrowers to fully repay their foreign-currency-denominated mortgages at a preferential exchange rate, business daily Vilaggazdasag estimated on Thursday, based on data collected from six major banks.

The newspaper said that it had based its estimation on data gathered from the banks showing that a total 59,400 borrowers had elected to take part in the early redemption plan through various dates between November 4 and December 16.

Vilaggazdasag calculated that borrowers would repay HUF 725bn in fx-mortgages under the plan, entailing losses of HUF 175bn to the six banks.

The newspaper said that much fewer people have shown interest in participating in another government plan allowing borrowers to repay their foreign-currency-denominated mortgages in installments but at fixed rates with the difference between the latter and market rates channeled into a so-called "buffer account" to be repaid beginning at the end of 2016.

Vilaggazdasag said that data collected from nine major banks show that 3,760 borrowers, or less than 0.004% of those eligible, had applied to participate in the fixed-rate repayment plan through various dates between October 21 and December 16. The newspaper estimated that a total of fewer than 9,000 borrowers, or less than 1% of those eligible, would take part in the plan.

The newspaper noted that Erste Bank had approved the most applications for participation in both the full- and fixed-rate repayment plans by December 16 at 11,000 and 380, respectively.