I read that the government wants a foreign currency loan cut just because election day is near. That is why it will meet on Monday on how to reduce the repayment installment of foreign currency lenders by 17-20% before the spring elections.
(I have already written in this article that forint lenders are in as much trouble as foreign currency debtors, and in this article that only 125 apartments (0.8% of the total housing stock) are threatened by foreign currency loans possible execution.)
Since the government doesn’t seem to want to get the cut, even the Mansion decided crazy differently than they wanted, so now I’m helping you get an immediate 20% down payment to everyone, even banks are happy to .
The total amount of Hungarian foreign currency housing loans is HUF 1,828 billion, with 222 thousand contracts. It does not include foreign currency loans and fortunately the government does not want to save them. Together, we would talk about $ 3,525 billion and 501,000 contracts. (Source: MNB)
Assuming an average interest rate of 7.5% and a maturity of 15 years, at the current exchange rate the average monthly repayment of an 8.23 million home loan is HUF 76,293 thousand.
The government wants to reduce this by 17-20%, or roughly 15 thousand HUF.
This would be equivalent to forcing banks to settle for 3.8% annual interest rate instead of the current 7.5%, as it would have a monthly repayment of $ 60,054 on the average loan.
For the HUF 1,828 billion foreign currency mortgage loan portfolio, banks’ gross interest income is roughly HUF 137.1 billion per annum. (You don’t need an academic membership to calculate: you multiply your total debt by 7.5% a year. That’s what banks’ total gross interest income for a year is.)
(Of course, this is not true, since we did not take into account the loss on non-performing loans, where there is no interest income but a direct loss of capital. This affects about one third of the loans, but let’s be very generous.)
My son, [drumming, growing excitement] here’s the solution:
Financial institutions currently pay a special tax of HUF 144 billion a year (source: budget).
The government should stop bailing out banks, drive out a special bank tax, and the $ 144 billion that would be released would be mandatorily spent by banks to cut interest rates on foreign currency loans.
The interest could be below 0%. ($ 144 billion a year versus $ 137 billion in interest income.) If we look at all real estate loans in foreign currency, banks could easily release more than half of the interest. Immediately the desired 20% reduction in monthly installments, and even much more.
In addition, the government promises that it will not break new bank taxes weekly, and will not hit other players in the economy over and over again with brainstorming, but rather try to fix the spending side of the budget. (I have a lot of tips on where to find a couple of tattered $ 50-100 billion from roadside stadium construction to free travel, and through 300 centers built instead of 3200 municipalities (and not to mention!), There are many ways to replace that wasted 145 billion.
As a result, the forint would gain 4-5% as well, meaning that the monthly burden of foreign currency debtors would be reduced by another significant item. We are already about 25% down.
You guys see how simple this is? It is not even necessary to rush the mansion into the ground, nor to rewrite the constitution. You are not going to ruin the banks, and the money of the depositors is not at stake.