The Hungarian government launched its Home Start home ownership programme on Monday, 1 September. Under the new scheme, citizens can apply for government-assisted mortgages with very favourable terms, with a fixed 3-per-cent mortgage rate and only a 10-per-cent down payment requirement.
People over 18 who either owned no real estate in the last 10 years, owned real estate worth under 15 million HUF ($44,000), or had no more than a 50-per-cent stake in a real estate property are eligible to take part. The goal of the programme is to have the young people of Hungary spend their income on mortgage payments, going towards a house or apartment they own, as opposed to spending it on rent going to their landlords.
Since the launch, State Secretary for Parliamentary and Strategic Affairs Miklós Panyi of Hungary has already talked about the strong public interest in the programme.
‘We launched yesterday, and the first day turned out to be quite strong. First of all, interest in the programme is enormous, with thousands of customers applying at banks in a single day. Financial institutions were prepared; they were able to handle the load, and there were no reports of major disruptions anywhere. It is already clear that many years of real estate and credit market records will be broken. The real estate market and lending are picking up speed!
It worked out as we expected: the fixed 3-per-cent loan sparked fierce competition among banks, with many of them announcing new discounts for their customers on the very first day. In addition to fast and personalized service, increased bank staff presence, and extended opening hours, banks are offering a wide range of discounts to first-time homebuyers,’ the State Secretary boasted about the success of the initiative in a Facebook post on Tuesday, 2 September.
In order to facilitate a smoother application process, the Hungarian government also released an application for the Home Start programme.
It is also worth noting that Hungary already had one of the highest homeownership rates in the EU at 91.5 per cent, according to data from Tradingeconomics.com. It is only behind Romania (94 per cent) and Slovakia (93 per cent), and far ahead of Western European nations such as Germany (47 per cent), Austria (54.5 per cent), and Denmark (61 per cent).
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