• Initial fees in general
• Documents required to obtain a mortgage
• Why is it worth taking a mortgage in Hungary?

OC International Client Services provides clients with the best financing options available. We are in contact with 29 banks operating in the Hungarian market, thus clients can be assured that we can cater for their needs and provide a financing option suitable.

Mortgages and more recently buy to let mortgages are available for individuals as well as for corporations.

For an Apartment Purchase Loan, the maximum loan to value is 80% with income verification. Without income verification, the maximum amount of loan available is 60% of the purchase price of the property. Equity release is an option available for the clients’ who already own apartments in Hungary and is available with LTV’s up to 70% of the purchase price. This is often called as Freely Usable Loan.

Interest only mortgages are also available in the Hungarian market, meaning in the first 6 years (maximum), the clients will only pay the interest and will start repaying the capital only in the 7th year.

Buy to let mortgages are available are available with LTV’s up to 90% of the purchase price.

Initial fees in general

• Value appraisement fee: 30,000 HUF (120 €)
• Contract concluding fee: 1%
• Notary fee (according to the notary)
• Disbursement fee: 0.5%
• Fee of Land Registry: 12,000 HUF (47 €)
• Fee of Title deed: 4,500 HUF (18 € )
• Collateral: 3 times of the monthly instalment – at the time of expiring the mortgage, this amount will be repaid

Loans and leases are available in CHF, EUR and in HUF. Please note that clients cannot be over the age of 70 when the mortgage expires.

Documents required to obtain a mortgage

• Sale and purchase contract
• Title deed
• Floor plan
• Founding documents of the property
• Passport copy countersigned by the notary
• Loan application formula of the given bank
• Certificate of income
• Payslips of the last 3 months
• P60 (Tax return)
• Original copies of bank statement for at least the last 6 months
• Credit Bureau Report/Equifax Statement
• Power of attorney

Once a client has submitted the above documents it will take approximately 4–6 weeks to process.

The service fee of our agency in all cases is 1% of the total loan amount.

It is advisable to start applying for the mortgage 6 months before the handover of the apartment in order to ensure the funding is available for completion.

Why is it worth taking a mortgage in Hungary?

Let us consider the following example:

Price	€100,000
Loan amount	€80,000
Deposit	€20,000
Repayment period (years)	20
Grace period (years)	5
Annual rental yield	6%
Annual average appreciation	8%
Total rental yield for 5 years	€30,000
Total appreciation yield for 5 years	€46,933
Total yield in 5 years	€76,933
Monthly instalment in the first year	€222
Total costs in the first year	€2,664
Monthly instalment from year 2-5	€381
Total costs from year 2-5	€18,288
Total costs in the first 5 years	€20,952
Interest rate	5.4%
Profit realized after 5 years	€55,981
Profit in percentages	267%

Total rental yield: €100.000 × 0.06 × 5 = €6,000 × 5 = €30,000 during 5 years (150% projected on the €20,000 cash!)

Total appreciation yield: €100,000 × 1.08 × 1.08 × 1.08 × 1.08 × 1.08 = €146,933

Based on the calculation above, at the end of the first 5 years, your profit will be €76,933 total yield, which is 385% based on the invested €20,000 (minus the paid mortgage interest, since in the first 5 years you will not have to pay the capital, only the interest).

Costs: interest of the mortgage only and nothing else!* Moreover, in case you want to sell the apartment after 5 years, you will be exempt from personal income tax. Do not miss this great opportunity to earn more profit!

For further information about financing, you are welcome to contact our mortgage expert:

Telephone: +36 1 487 3300

E-mail: mortgage-at-property.hu