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OTP cuts mortgage lending rates

OTP Bank Rt, eastern Europe's largest lender by market value, said it will trim its mortgage lending interest rates in Hungary as competition heats up for a declining number of consumers taking out home loans. The bank will lower its interest on forint-denominated mortgages for new homes to 5% from 5.25% and the rate on homes already constructed to 6.55% from 6.85%, Deputy CEO Csaba Lantos told the press today.
Housing loans had driven Budapest-based OTP's profit from 2002 until last year as the government subsidized mortgages. Competition for the loans has since increased because many consumers already took out home loans and the government in 2003 began scaling back subsidies to cut its budget deficit. “We have competition like we've never seen before,” Lantos said. “There's an interest-rate race going on and these are not our final words. We are determined to safely guard our market share.”