If you have a home loan, there are several options to choose from, depending on your temperament and wallet. There are fixed rate loans, often variable interest rates, and relatively stable, but not always the same, loans. What should you choose in terms of interest rates and what are the characteristics of domestic creditors?
Looking at all loans, half of the people, 51% , vote for variable rate loans . In the case of a home loan, 40% take the risk. This means that the initial installment we pay is relatively good at first, but this may change slightly – or greatly – as the economy changes. Remember, we talk about a lot of home loans: in the first 10 months of the year, we borrowed 500 billion of these loans.
Current interest rates are hard to come down
We can only be sure how much we will pay each month for years or decades if the plan is a fixed rate all the way. In the case of variable interest rates, it is good that our monthly income does not decrease or it does not hurt to increase if the repayment starts up, otherwise the loan will ‘run out’.
Fortunately, today, the amount of the installment loan can be regulated by the state in relation to the client’s monthly income. Contrary to the old days, a bank cannot agree to a loan that is unrealistic compared to the customer’s financial situation. This reduces the likelihood that repayment will be impracticable even if interest rates rise.
We didn’t learn too much about foreign currency loans
At present, the Hungarian market is characterized by too high a premium for fixed loans, ie too much security has to be paid. That is why many people vote to start with a small installment and trust that the rise in interest rates will not bring much appreciation.
If interest rates are recalculated only every five or ten years
The loan is still relatively safe, but if it is often adjusted to the interbank rate, our financial future is more unpredictable. Therefore, the former option is preferable.
Over five years, the fixed-rate loan is approx. 28 per cent , of those recorded for 1-5 years approx. 30 percent of them commit (based on Q1 2017). That is, almost as many people vote for the safer version as for the cheaper, yet more labile one.
According to surveys, families with a smaller monthly budget tend to take out riskier loans . It can be said that those who have fewer reserves can do everything but get borrowed money. But they should be moving towards a more secure solution.
Luckily, even if things go wrong, there is a lifeline. A loan repayment loan or a loan change is available to everyone if the repayment rate is too high.