A very long process has been interrupted lately. Loan interest rates are no longer falling (they have been slow to get where they are) and have not stayed low, but increased slightly. But you don’t have to panic any more, but rather catch the opportunity! We’ll show you why.
Interest on loans
We are all aware that the true profit of banks is the interest charged on loans granted. Therefore, in return, they are simultaneously giving us a larger sum. The borrowing rates are determined as follows. We take a so-called reference rate and the interest premium and add that up.
Currently, for home loans, this looks like the reference rate is the central bank base rate of 0.9% (for the time being) and the interest rate premium is set by banks. So it turns out that, according to the loan calculator, interest rates on loans over 20 years range from 2.5% to 3%.
What has happened lately and what is expected?
Recently , we have written several articles on the topic of rising interest rates . The reason for this is that many people suddenly started to worry about a slight increase in interest rates on home loans.
The reason for this was extremely simple. As the population borrows mortgage loans in record numbers and volumes, it becomes increasingly difficult to access free resources, which has led to an increase. And the bank passed it on to customers. There is no need to think about a huge increase, only 2-3 thousand HUF monthly for a 20 year 10 million HUF loan. But from this , the current loans are still very cheap.
These favorable conditions are not expected to last as long
The reason for this is that specialists are slowly expecting central bank base rates to increase. This is one of the important components of the retail loan interest rate, as described above. Just think that while 0.9% is now interest, in 2008 it was 11.5%. This is where the interest rate spread came to be, the difference is huge.
As a matter of fact, a monthly repayment of a 20-year $ 10 million loan is now available for $ 51,925, with a 7% interest rate being $ 77,530 . Well, it seems clear that next year there won’t be another 7% interest rate on the loan, but it’s better not to borrow when it’s cheaper. Now. Contact us! We will find the best opportunity for you financially.