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Early FX repayment scheme boosts value of new retail loans

The value of new retail loans Hungarian banks signed in December rose sharply compared to previous months as borrowers availed of an early repayment scheme for foreign currency-denominated mortgages, fresh monthly data published by the National Bank of Hungary on Friday show.

The government scheme allows full early repayment of the forex loans at discounted exchange rates. Lenders must cover the difference between market rates.

The MNB data show the value of new forint home loans came to HUF 39.4bn in December, well over the HUF 22.6bn in November and the HUF 18.8bn monthly average in the twelve months to the end of December.

The value of new forint consumer loans reached HUF 45.6bn in December, also well exceeding the HUF 29.0bn in November and the HUF 22.0bn monthly average in the twelve months to the end of December.

New home and consumer loan outlays also showed a marked increase from October to November.

The early repayment scheme was launched at the end of September and borrowers had until the end of December to declare their intent to participate. Full repayment must be made by the end of February.