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Banks required to establish monthly “lending limits” for retail clients

Hungarian banks are required to establish the maximum amount a retail borrower is capable of repaying each month based on an evaluation of their income under regulations in force from Friday.

Banks are allowed to sign contracts for no more than 80% of this monthly “lending limit” in the case of euro-denominated loans and 60% in the case of loans denominated in other currencies.

Regulations in force since March 1 require banks to limit the loan-to-asset ratio on retail mortgages. The amount for which lenders may sign a home mortgage contract is limited at 75% of the home's value for forint loans, 60% for euro-denominated loans and 45% for loans denominated in other currencies. Vehicle leases are capped at 80% of the value of the vehicle for forint loans, 65% for euro-denominated loans and 50% for loans denominated in other currencies. (MTI-Econews)