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Parliament passes bill easing conditions for home loan borrowers

Parliament on Monday approved a package of legislation authored by governing Fidesz that eases conditions for retail borrowers with home loans or home leases.

The legislation allows retail borrowers to make early repayment or extend the term of their home loans without penalty once a year if the debt outstanding does not exceed HUF 1m. Penalties for early repayment will be reduced from 2.5pc to 1.5pc and from 2pc to 1pc of principle, depending on when the repayment is made.

The legislation requires banks to use a mid-rate when determining the size of installments on foreign currency-denominated loans.

The legislation prohibits banks from making unilateral changes to contracts that put borrowers at a disadvantage, with a few specified exceptions.

Banks will be allowed to charge penalties to clients behind on repayments only up to 90 days. (MTI Econews)