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Govt to decide on way of helping public employees to repay FX mortgages this week

The government plans to decide early this week on planned support to help public sector workers to repay their FX mortgages, Government Spokesman Andras Giro-Szasz told the press on Tuesday.

National Economy Ministry state secretary Gyula Pleschinger and Deputy State Secretary Roland Natran consulted with banks that lent to public sector workers, and National Economy Minister Gyorgy Matolcsy will meet the head of the banking association this week, Mr Giro-Szasz said.

Prime Minister Viktor Orban urged public sector workers to ask their employers for assistance to participate in the scheme in a letter sent in late December. He added that the government plans to provide preferential-rate forint loans for those willing to fully repay their FX mortgages if they apply by the year-end deadline. Under an autumn government decree employers may give employees tax-free support of up to HUF 7.5m to help early repayment.

In an interview on January 9, the Prime Minister said more than 40,000 public sector workers had asked their employers to help them participate in the scheme.

A government scheme launched last autumn allows borrowers to fully repay FX mortgages at a fixed preferential exchange rate. Borrowers had to apply to join the scheme by the end of 2011. They must complete repayment, in full, within 60 days after submission of the application, but - under a November agreement between banks and the government - they must have the money or/and a forint loan commitment on their account by the end of January.

 The latest data by financial market regulator PSZAF shows that 94,337 borrowers took advantage of an early forex mortgage repayment scheme at discounted exchange rates between September 29, when the scheme was launched, and the end of December. The repayments came to HUF 468.0bn at the scheme’s discounted exchange rate and HUF 642.1bn at current exchange rates. Banks must cover the difference between the two rates.