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Troubled mortgage holders to pay Sept installments at fixed rate

Hungarian borrowers with foreign currency-denominated loans who opt to join a state assistance program can already make their September repayments at a fixed exchange rate, National Economy Ministry deputy state secretary Roland Nátrán said at a press conference on Friday.

Hungarians may opt to join the earlier announced assistance program from Friday. Repayments for those who do join will be calculated using a fixed exchange rate for a period of 36 months but no longer than the end of 2014. The rate for Swiss franc-denominated loans ─ once the most popular retail lending product in Hungary ─ is set at HUF 180 to the franc. The rate for euro-denominated loans is set at HUF 250 to the euro, and the rate for yen-based loans is set at HUF 200 to 100 yen.

The balance resulting from the difference between the fixed rate and the market exchange rate will be put on a special, forint account. The interest rate on the special account is pegged to the three-month BUBOR.

Nátrán said the rate at present on the special accounts is 6.09%. Banks may not make a profit on the accounts, nor may they charge additional fees or account extra costs on the loans of participants in the assistance program, he added.

A notary fee for participants will be published in a ministerial decree next week, Nátrán said.

The government will establish within days a committee to monitor the implementation of the assistance program and report back on a regular basis, he said. The monitoring committee will include experts from the government, the National Bank of Hungary, financial market watchdog PSzÁF and civil groups, he added.