MNB: Just 162 new exchange rate cap contracts signed
Lenders signed just 162 exchange rate cap contracts with foreign currency mortgage loan holders in October 2014, bringing the number of such contracts signed since April 2012 to 180,412, the National Bank of Hungary (MNB) said on its website on Friday, adding that the data will no longer be updated due to the upcoming forint conversion of foreign currency loans.
The total number of FX retail mortgage contracts held by banks fell by a further 4,000 to 462,000. The number of new contracts was down 53% from the previous month. The value of participants' loans came to HUF 1,476.6 bln at the end of October, which accounts for 41.6% of the total value of retail foreign currency mortgage loans.
The monthly number of participants joining the scheme, which aims to make repayments for retail borrowers with FX loans easier, peaked at around 18,000 in June 2012 before tapering off to nearly zero by August 2013. The numbers started to rise slowly again after eligibility was broadened in November 2013 to include borrowers with non-performing loans and ones participating in other borrower assistance programmes.
Under the scheme, borrowers' repayments are based on the exchange rate cap until maturity or for a period of five years. The difference between the capped rate and market rates is placed on a technical account for repayment later.
The exchange rate cap scheme is expected to remain in effect until April 2015 as foreign currency loans will be converted to forint loans under legislation passed late November with effect of February 1, 2015.
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