not only families, young people do well with it
What has a bank mortgage got to do with the environment, and what makes a home loan green? We’ve gathered everything you can know about the new 2.5% Green Loan facility. Also, we examined whether this will affect the current credit and real estate markets: are construction costs expected to rise further, and thus your home in Hungary? But our article also reveals that with the new construction, Hungarian families can save up to 10-20 thousand forints per month.
Perhaps the question arises in many people, what does a bank mortgage have to do with environmental protection, and what will a home loan go green for? The answer is simpler than we might think. It is well known that reducing energy consumption and waste is becoming increasingly important for the European Union. These are not only a means of achieving a sustainable energy supply, reducing greenhouse gas emissions, guaranteeing security of supply, but also a degree of EU competitiveness.
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The Energy Performance of Buildings Directive aims to make energy buildings at a high level and to decarbonise their building stock by 2050. Understandably, catching up has begun in Hungary as well, and the housing loan market is a suitable starting point for incorporating green aspects. Given the low energy efficiency of the residential real estate portfolio, which accounts for nearly a fifth of the domestic primary energy consumption, there is important space for modernization.
In the spirit of this, the Magyar Nemzeti Bank 2021. aspects, and at the same time the demand for green homes must be repeated, or through this the supply must be stimulated.
As part of this, a loan with a very good interest rate, the so-called green loan, has been available since the beginning of October in Hungarian bank branches. The goal is to build houses and apartments that are sustainable, so the energy extracted or produced should be used efficiently and not wastefully. The FGS ZOP [BZ1] in part, only energy-efficient loans for the purchase or construction of a new home in Hungary can be granted.
But why is it worth it?
The green loan, which has been available since October 4, has a better interest rate than the cheapest “traditional” home loan currently available, as the interest rate is fixed at 2.5 different throughout – there can be no more than that later. Most of it can be planned for 25 years with it, as it has a possible term, but it can also be repaid in a shorter period of time: it can depend on the cross of the prospective debtor and of course the amount of the loan taken. This can be completed for 70 million forints.
In addition, the claim is important clauses that there may be more than 4 debtors for the construction and only they may acquire ownership of the property, but who is in what proportion is not specified. The fact that they have to live in the property for less than 10 years in a way of life means that it is the intention of the decision maker that this loan is not an investment discount but for those who want to live in new, green, energy efficient homes.
The big advantage is that there is no expectation of children or marital status, so not only young people, those about to start a family, but everyone who meets the criteria and has justifiable income to pay the installment with security every month. In this case, too, it is possible for 50 or 60 percent of the net income to be the installment. The loan amount can reach a maximum of 80 percent of the value of the property, but the bank finances a lower value for some forecasts.
Green credit can also be combined with CSOK for families who meet the conditions. You can choose HUF 10 million for 2 existing or corporate children and HUF 15 million for 3 children, this must be deducted from the HUF 70 million, so the two together cannot exceed the maximum amount that can be taken up.
Subversives: what changes as a result of green credit?
Like all new loan schemes, previously CSOK, the baby-waiting loan, if not immediately, but in the long run has had an impact on the real estate market, which is why the big question is, what will the green loan cause in the coming months and years?
The Green Home Program of the Magyar Nemzeti Bank provides a 2.5 kind interest rate loan to domestic individuals who are newly built, have a lower BB energy rating, and plan to purchase or build a home or family house with only 90 kWh / m2 of primary energy demand. The new loan will have a noticeable effect on the housing market. In the current rising interest rate environment, we can only take out a lower amount of credit from home buyers compared to the given incomes, the green creditworthiness allows the available station to be financed at a similar or more favorable interest rate level than in previous years. As a result, demand for new housing may remain buoyant, which will provide an incentive to launch new developments, meaning that it will freeze in the market due to declining demand. The soft loan also helps the sustainable renewal of the housing stock by providing lower-energy housing on the market with more favorable emission performance.
– said Péter Futó, real estate market analyst of the Portfolio.
But this new construction will be possible not only for the housing market, but also for the credit market, with which the family spending up to 10-20 thousand forints per month can be saved.
By lowering the interest rate on loans for energy-efficient real estate in the case of the central bank and children, an average home will save HUF 10-20 thousand a month compared to a home loan, and HUF 2-5 million a month for households over the entire term. This represents an important demand-side stimulus in the green housing market, part of which, like CSOK, will serve as a price increase for developers to swallow. Even if the final beneficiaries of the new loan program do not in fact come 100% from the available families, the program will provide an important task for the gradual green change of the Hungarian housing stock and will be a catalyst for home buyers and builders to become increasingly aware of the energy efficiency. This is served, for example, by the annual requirement of 90 kWh, which is even stricter than the officially announced BB from 2022 onwards for all newly built properties. According to the data of the CSO, the share of loans taken out for new dwellings in the housing loan market was only 21%, and depending on the measure, this ratio will also increase. It can be seen that the program is already very popular among banks, as they can gain a very conscious customer base with it.
– István Palkó, the leading analyst of the Portfolio, told the Money Center.
Where? We? Who? And of course how much?
Necessary information about green credit:
- with a maximum interest rate of 2.5 percent
- the total term is 25 years
- the interest is a fixed amount throughout
- the total amount that can be taken up is HUF 70 million
- In combination with CSOK, HUF 10 million or HUF 15 million is interest-free (but still cannot exceed HUF 70 million)
- the loan taken out can be more than 80 percent of the price of the property
- can be used to purchase or build energy efficient (less BB energy rated) new residential property
- a person can take out a single green loan
- the principal debtor must acquire ownership in all ways and only 4 debtors can be involved
- the owner must live a lifestyle in the purchased property for a minimum of 10 years.