The interest rate on a home loan with a 10-year interest rate, the most preferred by the population, has never been as low as it is now. In the market, you can meet interest rates below 3%, meaning a claimant who is looking for a fixed rate home loan for 10 years.
And with low interest rates, homeowners can benefit. Those who are now in the turn of the interest period may have their monthly installments reduced by up to 15 thousand HUF.!
What is the Interest Rate Period for Home Loans Today?
The home loan market has been very restructured in recent years. The most popular loan was a 10-year fixed-rate home loan, the type most borrowed. At the same time, interest rates on 5-year fixed-rate mortgages declined from 20% in the previous market share of over 40%. Fixed rate loans also became more popular for around 27%. However, variable rate home loans have almost completely disappeared from the credit market.
Was the interest rate decline expected?
BIRS (Budapest Kamatswap Transactions – the rate at which banks lend to each other over the long term) have fallen sharply in recent years. BIRS is an acronym derived from the acronym of Hungarian, not English, Budapest Interest Rate Swap. Why is BIRS important? Because banks adjust the interest rates on their fixed loans to this indicator, including the interest rates on home loans. BIRS is the base interest rate plus interest and other charges. Therefore, it is not surprising that interest rates on 10-year mortgages have fallen.
What is an Interest Period?
The interest period is defined as the period during which the interest rate of a given loan cannot change, so the pay-in part of the given loan is fixed for that period. The longer the interest period of a loan, the more predictable the installment will be.
Is There a Difference Between Individual Home Loan Rates?
Of course, credit institutions cannot immediately track the movement of BIRS, and they also need some time to re-price their home loans. However, each bank applies a different interest rate premium on its loans, so there will always be a difference between home loans offered by individual financial institutions. That is why it is worth asking for the help of credit brokers, who can compare the offers of each financial institution for free.
Why is it worth applying for a home loan now?
According to expert estimates, the best 10-year interest rate on a home loan today is 2.81%, which is more than 1.4% lower than the level at the beginning of the year. In the case of a 20-year HUF 20-year home loan with an interest rate period of 10 years, this decrease in interest rate reduced the amount of installments payable by HUF 15 thousand per month. This monthly savings can save the claimant more than HUF 3 million until the loan expires.