PM expects 150-300K to apply for forex mortgage early repayment scheme - TV
Prime Minister Viktor Orbán on Tuesday said he expects between 150,000 and 300,000 Hungarians to avail of a government scheme allowing early repayment of foreign currency-denominated mortgages at a fixed exchange rate that is under the market rate.
Speaking late Tuesday in a program on commercial television broadcaster HírTV, Orbán said the 150,000-300,000 borrowers have the savings to repay their loans in a single installment -- a requirement of the scheme -- but more could take the decision if they are helped by friends or relatives.
Under the plan, announced on Monday, banks are to cover the cost of the exchange rate difference. However, the plan does not require them to offer clients forint loans to pay off their foreign currency-based ones.
Orbán said he expected the plan to "come under attack" and conceded that the European Court could take a decision years from now saying the plan is illegal. The Hungarian state, not borrowers, will bear the burden of any such decision, he added.
"In my knowledge of Hungarian law, I can say that the proposal by Fidesz and KDNP does not go against Hungarian law," he said.
Asked how many calls he got after the plan was announced on Monday, Orbán said one or two heads of government and the president of European Commission called, but he added it would be inappropriate to reveal what they said. He did say that he took about as many calls as when the government introduced an extraordinary bank levy in 2010.
Asked what he meant when he said on Monday that the state "stands behind" OTP Bank and FHB Bank, two big independent banks in Hungary, Orbán said parent banks stand behind their foreign units if they have difficulty, but the state stands behind Hungarian banks without foreign parents. This does not mean the state wants to take an ownership stake in either bank, he stressed.
Asked about a plan to cap lenders' effective annual percentage rates (APR) at 30%, Orbán said the limit would apply to all lenders, even sub-prime lenders. But the final decision will be taken by Parliament, he added.
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