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PSZAF spokesman puts participation in early repayment at 15-20%

The percentage of FX borrowers participating in the government’s early repayment scheme is expected to be 15-20% based on preliminary figures, Istvan Binder, spokesman for the Hungarian Financial Supervisory Authority (PSZAF), said in a television programme early on Thursday.

The final figure will be published as soon as PSZAF has calculated it, possibly as early as on Thursday, he added.

The government scheme, launched at the end of September, allows early repayment of foreign-currency-based mortgages at a discounted exchange rate. Lenders are covering the difference between the discounted exchange rate and the market rate. Borrowers must declare intent to participate in the scheme by the end of 2011 and make full repayment within 60 days after that.

Mr Binder said many fewer borrowers, only around 2,000, have shown interest in participating in another government plan allowing them to repay their foreign-currency-denominated mortgages in installments, but at fixed rates with the difference between the latter and market rates channeled into a so-called "buffer account" to be repaid beginning at the end of 2016.

Mr Binder added that new regulations, expected to be in place from April-May, will provide more favourable terms for borrowers to take advantage of this option. Under the new rules, the government and the bank sector will cover the interest costs of the amount to be accumulated on the buffer account.

Mr Binder said the Banking Association estimates that half of the remaining clients - amounting to hundreds of thousands of borrowers - could apply to participate in the scheme.