FX conversion bill prohibits lenders from raising rates

EU

The interest of the foreign currency or FX-denominated mortgage loans to be converted into forint loans cannot exceed the interest of the original loan under a bill on the conversion submitted by the justice minister to parliament today.

The only exception to the rule is if the original interest was below a set minimum rate -- the three-month Budapest interbank offer rate (BUBOR) plus 2% -- by the law.

Banks will have to apply an interest rate that is pegged to the three-month BUBOR.

The interest spread over the BUBOR should be the same as the spread on the original loan, but the spread is limited to a range of 2-5.5% for home mortgages and 2-7.0% for other mortgages.

The conversion law will apply to loans taken out between May 1, 2004 until borrowers' relief legislation came into force in the summer.

ADVERTISEMENT

Business, consumer confidence improves - Századvég Analysis

Business, consumer confidence improves - Századvég

Opposition parties to begin PM candidate primaries Elections

Opposition parties to begin PM candidate primaries

Martina Cifer joins Avison Young Hungary Appointments

Martina Cifer joins Avison Young Hungary

BFK developing regional cycling strategy City

BFK developing regional cycling strategy

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.