“With the consolidation of interest rate levels, residential loan demand has returned. Banks are open to financing residential park developments, but under stricter conditions,” says Brunáczky.
“The residential market is in transition. Hungary has just undergone a change in government, and with that, it is hoped that inflation will now be under control. With a new government, there is the possibility of improved relations with the EU, which could help strengthen the economic and financial environment. Further, there is movement towards adoption of the euro,” he adds.
Kíron’s profile is that of a residential mortgage lender to private individuals, acting as a broker between banks and residential customers. As an independent mortgage broker, it partners with the seven largest banks. Kíron’s primary focus is residential mortgage lending for private individuals rather than property developers. However, it does assist with some small- to medium-sized business mortgage products and additional banking offerings such as credit cards, bank accounts, and home insurance.
The company handles market-rate mortgages, personal loans, and government-subsidized loans. It facilitates financing for a variety of residential properties, including existing and new construction, duplexes, separate houses, and apartments, though there is an interest in expanding into commercial loans for SMEs. Average loan sizes for current commercial activities are around HUF 50 million. Kíron also lends to smaller retail spaces.
As with other real estate sectors, banks are offering more favorable loans for more energy-efficient assets.
“The key is ESG: green, energy-efficient (low utility cost) properties enjoy an advantage. Finding funding for outdated, old-construction projects is much more difficult and expensive,” Brunáczky explains.
“The challenge is uncertainty caused by purchasing power and high construction costs. With ESG elements and energy efficiency, banks factor energy efficiency ratings into loan considerations. Properties with lower ratings may face less favorable conditions, while those with high energy efficiency ratings are eligible for custom offers, including considerations for assets like solar panels,” he says.
By way of an example, the office sector is currently seen as the most challenged area in the eyes of financiers. Home office and hybrid working have remained permanent trends.
“Only premium-category, excellently located Class ‘A+’ offices with strict sustainability certifications (such as LEED, BREEAM) will easily get the green light,” Brunáczky notes.
Regarding housing market affordability, Brunáczky says property prices have risen beyond affordability thresholds for many individuals due to subsidized loans introduced by the previous government. With the termination of these schemes, it is anticipated that prices will drop to approximately 5% by the end of the year, improving residential market accessibility for potential buyers.
The European mortgage market is dominated by the so-called Eurozone Champions, where the euro is used, and the cheapest residential mortgage loans are available, typically with interest rates in the 2.8-3.6% range.
“Southern Europe (Spain, Portugal, Italy) currently offers the most favorable conditions; market-rate fixed or mixed-interest loans are available between 2.8% and 3.5% for clients with a good credit rating,” comments Brunáczky.
High credit-security core countries, such as Germany, France, and the Netherlands, have stable interest rates between 3% and 3.8%, and, in rare cases, up to 4.3% for longer 10–20-year fixings. In France, interest rates are low due to stricter credit assessments, but it is harder to get a loan. Finland is one of the most unique markets, where the vast majority of loans have variable interest rates (tied to short-term Euribor). Here, the average mortgage interest rate hovers around 2.8%.
Among non-eurozone but developed markets, the United Kingdom issues pound sterling-based loans. Due to Bank of England monetary policy, fixed mortgage interest rates are 5% to 5.5%, making it one of the most expensive Western European countries from the public’s perspective.
In Hungary and the wider Central and Eastern Europe, the currency question predominates. In the region, interest rate levels are determined by whether the country has already introduced the common currency, such as Slovakia, Slovenia and Croatia.
In neighboring countries that already use the euro, families also enjoy the benefits of being part of the Eurozone, with the average mortgage interest rate hovering around 3.5%. Hungary, with its forint-based loans, has a market-based interest rate that currently stands at around 6-6.2%, almost double the regional Euro average,
“What does this mean for your pocket? For an average HUF 30 million mortgage with a 25-year maturity, a Hungarian family pays roughly HUF 14 mln more over the loan term due to the higher interest rates than a Slovakian or Croatian family would for the same loan,” Brunáczky notes.
A favorable change is the reduction in interest rates from 6.49% to 6.19 by OTP Bank. As it is the largest retail bank in Hungary, others tend to follow its example. Brunáczky says that a 5% interest rate could be achieved within the next two years.
Economic stability is linked to improved relations with the EU, the resumption of funding, and confidence in national leadership. The current real estate market is described as being in a correction phase, impacted by the legacy of the previous government’s subsidized 3% Home Start program loans.
With regard to economic reality, the government’s goal is clearly to bring market-based loan rates below 5% and subsidized loan rates below 3%.
“The biggest challenge regarding this is that sustainably low interest rates require stable low inflation and a predictable forint exchange rate. If the market environment is uncertain, banks will find it difficult to sustain cheaper long-term lending, even under government pressure, without it leading to a squeeze in credit supply and stricter lending criteria,” Brunáczky concludes.
This article was first published in the Budapest Business Journal print issue of July 17, 2026.
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