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Govt to take decision soon on interest subsidies for troubled borrowers who buy smaller homes

Initiatives

The government will soon take a decision on an interest subsidy system for troubled borrowers with foreign currency-denominated mortgages who decide to buy smaller homes, National Economy Minister György Matolcsy said in a written answer to a question by MP Attila Mesterházy of the opposition MSzP.

The government plans to offer the interest subsidies to Hungarians with forex mortgages more than 90 days behind on repayments who decide to buy a smaller, cheaper home, Matolcsy said. The subsidy, which eligible borrowers may avail of for at most five years, will be pegged to 50% of the benchmark government securities' yield in the first year but be reduced gradually to 30%.

The plan for the interest subsidy system was unveiled as part of an assistance package for troubled borrowers with foreign currency-denominated loans in May 2011, the Minister recalled.

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