Everybody who wants to borrow has been waiting for this for a long time – The central bank wants to further stimulate price competition between financial institutions, so in the future it will introduce a rating to filter out the best loans.
According to the National Bank of Hungary, there is not enough price competition between loans. It is known that consumers, in this case borrowers, always benefit from price competition, because the more competition, the better they can obtain credit.
The rating created to boost competition is called “consumer friendly home loan rating”
What does the National Bank of Hungary expect from the introduction? In particular, it expects the spreads of interest rates to decrease and the transparency of loans to increase. The designation, “plecsnit”, if you like, can only be carried by constructions that meet all conditions. The aim of the central bank is to facilitate the spread of housing loans that are transparent, comparable, affordable and subject to a uniform set of conditions .
The qualifying measure is needed because, according to the National Bank of Hungary, price competition in the home mortgage market is currently unsatisfactory , as evidenced by the low number of loan redemptions interest rates are high in Hungary.
So the trick is slowly but surely losing ground
A consumer-friendly credit product is expected to be accessible to a wide range of customers, such as borrowers receiving a Family Home Creation Discount (CSOK). Other conditions include easy-to-understand criteria, comparability, simple administration (!) , And the lack of hidden costs and tying . What is Tying? Unfortunately, nowadays, it is not uncommon for a seemingly favorable home loan to be accompanied by extremely expensive insurance policies that are mandatory throughout the term of the loan and virtually neutralize the favorable rating of a start-up / seeming loan. This is now over, as obviously all sane customers will move toward consumer-friendly loans.
The consumer-friendly scheme must make future payment obligations more predictable. This means that the success of a staggering offer like “$ 20,000 in the first month and $ 95,000 in the second month” is over. Another important condition is to be able to flexibly adapt to the changing circumstances of clients’ lives and to encourage consumers to take advantage of credit swaps , so that fewer people are barred. The central bank is also in consultation with representatives of the banking market to finalize the details.