The government is planning to fix monthly household repayments of Swiss-franc-denominated mortgages at an unspecified rate of under HUF 200 to the Swiss franc, Parliamentary Economy and IT Committee Chairman Antal Rogán said on a television program on Tuesday morning.
The disparity in the fixed and actual HUF-CHF exchange rate would accumulate in state-backed five-year forint-denominated accounts, Rogán said.
“Today, when we take active steps to protect foreign currency borrowers, we must primarily take care of those who can no longer service their debt. They are the minority,” Rogán told TV2 on Tuesday.
Rogán noted, however, that it would be a “very big mistake” if the government did not establish a way to help the majority of households that continued to promptly repay their loans.
Rogán said that under the government plan, “people would start repaying their loans at an exchange rate lower than today, but the difference would materialize on a forint-based account with, say, a five-year deadline”. Rogán added “The state would guarantee [this account] to banks, and banks would pay a guarantee fee in return.”
Rogán did not specify the rate at which Swiss-franc-denominated mortgages would be repaid, though stated that “this would obviously be a lower exchange rate than today, so there is a high probability that it will be below 200 forints [per franc].” Rogán could not be drawn on an actual rate, saying that that would induce currency speculation while the government is not yet ready to decide on the matter.
If the franc were to firm beyond the unspecified rate to the forint, households would continue to make the same monthly repayments, while the exchange-rate difference would materialize on their new forint-denominated accounts, Rogán said.
“Later, if the exchange rate [of the forint] firms, people would not immediately begin paying less, but the difference [on the forint account] will decrease. This will make repayments more predictable,” Rogán added. The five-year account designed to smooth monthly repayments would effectively mean a new loan for households, the MP said.