The 3% interest-subsidised home renovation loan was launched on 1 February, designed to enable those who home renovation grant, who would not be able to pay the required deposit from their own funds. We have compiled the most important information on this topic.
The maximum credit limit is 6 million forint, and the maximum term is 10 years. The gist of it is that, provided the customer meets the conditions, the one they interest paid was just 3%, The state will cover the portion in excess of this for the entire term of the loan. Taking a loan of 6 million forints with a 10-year term as an example, this initially amounts to a monthly repayment of 58,000 forints, which may be reduced as the subsidy is repaid.
In addition to interest, lending institutions charge borrowers a fee based on the amount of the loan 1.5% expense allowance is due. Based on the maximum amount of 6 million, this amounts to 90,000 forints. It has also been stipulated that, of the 1.5% rate, the credit intermediary may receive a maximum of 0.8%, which, based on the example above, amounts to 48,000 forints.
The home improvement loan is classified as a mortgage-backed loan from a credit institution, so a notary and a valuer must be engaged in all cases during the proceedings.
Since this loan is essentially intended to the home renovation grant assistance in accessing the service for those who do not have the funds required for the co-payment, thus the the eligibility criteria are the same. Therefore, all the conditions set out in the home renovation grant scheme must be met. We covered this in detail in a previous article.
Once the application and the necessary supporting documents and certificates have been submitted, the credit institution assesses whether the applicant meets the criteria, and if everything is in order, it issues a so-called. enters into a grant agreement with the customer.
The Terms and conditions for early repayment are also extremely favourable, as the regulations stipulate that the financial institution may not charge the beneficiary any costs in such cases. Therefore, if a borrower wishes to make an early repayment, the credit institution is obliged, within 10 days of the payment being credited, to recalculate the repayment instalment whilst maintaining the original term, and subsequently to notify the beneficiary and the State Treasury.
An important prerequisite, that from the date of disbursement of the loan It must be submitted within 1 year our invoices relating to construction work carried out using the loan – this means that the planned works must be completed within one year. If this condition is not met, the borrower loses their entitlement to the renovation grant. An exception to this applies if the value of the renovation grant is less than 25% of the loan amount – so, for example, if we have borrowed 6 million forints, this would be 1.5 million forints. In this case, the interest subsidy will cease, which also means that the interest subsidy received to date must be repaid in a single instalment within 60 days.
We wrote this article because a number of people have expressed their slight regret at not having the required own contribution to qualify for the home renovation grant. Taking out a loan is something that should always be carefully considered, and as it involves long-term commitments, we do not encourage anyone to do so. This article is aimed at those who have already decided that they would like to renovate their home even if it means taking out a loan; we wanted to provide them with some additional information.
Our articles on this topic IDE Click here to view it.
