Residential mortgages in 2019

Expansion in the stock of housing loans

As of 31 December 2019, housing loans totalled HUF 3,632 billion, 9.3% (HUF 308 billion) more than at the end of 2018. Almost 55% of household loans were housing loans (stock value) with no year-on-year change in the housing loans-to-GDP ratio (7.8%).

In the first half of the year, borrowing was mainly driven by favourable market loans. Subsidized lending increased sharply in the second half of the year, but has not yet played a decisive role in total lending.

Compared to the end of 2018, the stock of state-subsidized loans increased by 1.2% and that of non-subsidized loans by 11%. As a result, the share of non-subsidized loans in the total loan portfolio increased from 82% to 84% during the year.

Figure 1
Changes in the stock of housing loans
Table 1

Stock of housing loans by type of credit institute as of 31 December 2019

Credit institute Number of loans Volume, HUF billion
Bank 318,268 2,120
Mortgage bank 209,111 1,033
Home savings bank 137,278 479
Total 664,657 3,632

Savings and credit cooperatives, which accounted for 3.0% of all housing loans in the first half of 2019, merged with Takarékbank in the second half of the year, further increasing the total volume of bank loans. Accordingly, the share of banks in all housing loans increased from 56% to 58%. At the end of 2019, the share of mortgage banks and home savings banks (29% and 13% respectively) was similar to a year earlier.

The share of problem-free loans has been steadily improving since 2015, rising from 89% in 2016 to 97% in 2019.

By the end of 2019, the share of performing loans exceeded 97%, and the 2.7% share of non-performing exposures showed improvement compared to the situation a year earlier (5.1%). By the end of 2019, the number of non-performing loans decreased from 34 thousand at the end of the previous year to 18 thousand. In 2019, restructured housing loans accounted for 0.8% of performing loans and 29% of non-performing loans.

Rise in average amount per loan approved

In 2019, 97 thousand housing loans were approved, amounting to HUF 907 billion. Compared to the same period in 2018, loans approved decreased by 11% in number and increased by 6.3% in volume. Loans approved averaged HUF 9.4 million at the end of December 2019, HUF 1.5 million more than at the end of 2018.

During the period under review, several measures contributed to the expansion of subsidized housing lending:

  • From the end of 2018, the amount of family housing allowance (CSOK) available for new housing increased, and the number of potential beneficiaries also expanded.

  • From July 2019, CSOK loans were also available for buying second-hand homes, and the value limit of HUF 35 million was abolished, thus making this subsidized loan available to a wider range of urban applicants. At the same time, a village CSOK was launched, providing subsidized loans for buying and renovating homes.

    As a result, almost two-fifths more state-subsidized housing loans were approved in 2019, while their total amount almost doubled: the average loan amount increased from HUF 7.4 million a year earlier to HUF 10.1 million. The number of loans without state subsidies decreased by 15%, while their average amount increased from HUF 7.9 million to HUF 9.3 million compared to 2018.

In 2019, credit institutions did not disburse foreign currency-based housing loans.

Figure 2
Changes in the amount of housing loans approved
Table 2

Approved housing loans, 2019

Housing loans Number of loans Volume, HUF billion
State-subsidized 12,688 128
Non-subsidized 83,963 778
Total 96,651 907

In the second half of 2019, the share of banks in home lending did not change compared to a year earlier, while that of mortgage banks increased and that of home savings banks decreased. In the second half of the year, 53% of the volume of loans granted for housing purposes was provided by banks. The share of mortgage banks increased from 26% in the second half of 2018 to 35%, while that of home savings banks fell from 20% to 12%.

Most loans were taken for buying second-hand homes

During 2019, more than 111 thousand housing loans were disbursed, with a total value of HUF 876 billion. Loans disbursed increased by 2.3% in number and by 6.5% in amount compared to the same period last year.

  • Home loans continued to be dominated by loans for buying second-hand homes, with more than half of all loans disbursed. In 2019, the number of loans disbursed for buying second-hand homes decreased by 5.0% over the past one year. The average loan amount increased from HUF 8.9 million a year earlier to HUF 9.4 million.
  • Loans for construction increased by nearly one third in number and by almost a quarter in amount compared to 2018. The average loan amount decreased by HUF 300 thousand to HUF 4.5 million. Loans for buying new homes increased by 24% in number and by 29% in total value. An average of HUF 11.4 million was disbursed for this purpose, which is HUF 400 thousand more than a year earlier. In 2019, the share of loans for buying new homes increased. The total value of loans for building and buying new dwellings approached one-third of the amount of loans for buying second-hand dwellings, compared with a quarter in the previous year.
  • In 2019, modernization and expansion loans decreased by 21% in number and increased by 13% in total value compared to the previous year, with their average loan amount increasing from HUF 2.9 million to HUF 4.2 million.
  • In addition to the above-mentioned main loan purposes, loan redemptions (refinances) grew by two thirds in number and by a tenth in amount compared to the same period of the previous year, with their average loan amount declining by nearly HUF 2 million.
Figure 3
Amount of disbursed housing loans by purpose
Table 3

Disbursed housing loans by purpose, 2019

Purpose Number of loans Volume, HUF billion
Construction 19,249 87
Buying a new home 9,353 106
Buying a second-hand home 63,814 599
Modernization, extension 11,872 50
Loan refinancing 5,511 21
Other purposes 1,540 13
Total 111,339 876

The average maturity of disbursed housing loans increased from 15.3 years to 15.5 years in one year. The maturity of housing construction loans was the longest, reaching 18.1 years, followed by loans for buying new housing and second-hand housing (with average maturities of 16.9 and 16.2 years, respectively).

With regard to new and second-hand dwellings, the difference between the maturities of loans was even more significant in the first half of the 2000s and then narrowed significantly by 2015. In 2016–2018, a temporarily opposite trend prevailed, but by the end of 2019, the difference between the maturities of the two loan types had narrowed to less than 1 year.

Figure 4
Average maturity of housing loans

One-fifth increase in the volume of CSOK grants

In the period between January 2016 and December 2019, the number of family housing allowance grants disbursed by credit institutions was more than 115 thousand, amounting to HUF 275 billion. Loan amounts per disbursement averaged HUF 2.4 million.

Table 4

Family housing allowance grants by purpose, 2016–2019

Purpose Disbursements
number, grants volume, HUF billion
Constructing a new home 30,222 89.1
Buying a new home 13,113 77.4
Buying a second-hand home 68,378 105.4
Enlarging a home 3,580 3.2
Total 115,293 275.1

A total of 43.3 thousand disbursements were made for building and buying new homes, accounting for almost 38% of the cases. For the grant amounts requested, this ratio was just the opposite, with 61% of the total amount supporting the purchase of new homes.

On average, one in six of the more than half a million (542 thousand) housing transactions realized between the first half of 2016 and 2019 benefited from this grant opportunity. The share of grant users can be estimated at 42% for new home purchases and 11% for second-hand home purchases.

In 2019, as a result of the already mentioned measures expanding the size and availability of this grant opportunity (CSOK), the number and amount of grants disbursed also increased.

Table 5

Changes in family housing allowance grants

Year Disbursements
number, grants volume, HUF billion
2016 20,755 47.4
2017 29,104 70.1
2018 31,202 71.3
2019 34,232 86.3
Total 115,293 275.1

In 2019, after a more modest expansion in 2018, the number of disbursed grants increased by 9.7% and their amount by 21% compared to the previous year.

In 2019, more than half (53%) of all grants were used to buy second-hand homes and two-fifths to build or buy new homes. However, taking into account the total value of all grants disbursed, this proportion shifted towards higher value new housing grants: 38% of the total amount was spent on second-hand housing and 60% on new housing.

Average amount per disbursement in 2019 was:

  • HUF 2.8 million for building new homes,
  • HUF 5.6 million when buying a new home and
  • HUF 1.8 million when buying a second-hand home.

Grants used for housing expansion increased in proportion from a slight 1.2% in 2018 to 5.9% in 2019, with an average disbursed amount of HUF 800 thousand. In the second half of 2019, disbursements for renovation and housing expansion increased almost tenfold in number and thirteen fold in volume. This was due to the village family housing allowance (CSOK) scheme introduced at this time, in which applicants could spend half of grant amounts on housing expansion and renovation.

In 2019, more than 95% of the volume of CSOK grants was disbursed by banks, 1.4% by mortgage banks and 3.4% by savings and credit cooperatives merged in the meantime.

Figure 5
Changes in the number of family housing allowance grants

Methodological notes

Data are supplied in the framework of data collection No. 1868 entitled ‘Report on residential home lending’. The reporting obligation is ordered by Government Decree 288/2009 (XII.5) on data collections and data receptions of the National Data Collection Programme.

Personal loans are not subject to this survey.

The classification of loans extended by credit institutions is regulated by MNB Decree 39/2016 (X.11.) on non-performing exposures and prudential requirements for restructured claims. Therefore, the section entitled 'Rating of home loans' has changed in the publication according to the following categories: the concepts of ‘performing exposure’ and ‘non performing exposure’ has been introduced, including restructured performing and non-performing exposures.

Purposes of mortgages and subsidies:

construction: building a new home, adding a new floor with mansard rooms to a detached or a semi-detached house, mansard loft conversions in case of a builder with three or more children

new home purchase: buying of a new home built for sale

purchase of a second hand home: buying of a resale home marketed in the secondary home market

modernization, extension: an increase in the comfort of the dwelling as a result of modernization; an increase of at least one additional room in the floor area of the dwelling

loan conversion: repayment of former mortgage

other: home purposes not covered by the above purposes

Data providers (credit institutes) are classified as follows:

  1. Banks
  2. Specialized financial institutes
  3. Specialized credit institutes
    • Home savings banks
    • Mortgage banks
  4. Financial cooperatives
    • Savings associations
    • Credit unions

Changes affecting residential home lending:

From the second half of 2011 to February 2012, a scheme was implemented to support foreign currency mortgage borrowers with the temporary option of early full repayment at a fixed exchange rate. According to the law, this option was open for those who had a foreign currency mortgage. Furthermore the government agreed with the Hungarian Banking Association on the following five-point Home Protection Action Plan:

The exchange rate fixing is to reduce significant exchange rate changes of certain foreign currencies. Discounted exchange rates were fixed for a transitional period at HUF/CHF 180, HUF/EUR 250 and HUF/JPY 2.5. Differences between the fixed and the actual rates will be collected on a ’Special Forint Account’, which, after a transitional period, are to be paid out under preferential conditions.

The foreclosure quota is to regulate the auctions of credit institutes. For lower value real estate properties (apartments, detached houses) a foreclosure quota was introduced to provide safety for people with mortgage arrears and to prevent the dumping of a large number of homes on the market.

A home protection interest rate subsidy may be granted for those defaulted borrowers who convert their foreign currency loans to forint loans and live in the real estate that serves as collateral. From the second half of 2011, further measures were the establishment of the National Asset Management Company and the authorization of credit institutes to restart foreign currency mortgage lending under more stringent conditions.

Table 6

Number of questionnaires completed by respondents

Period Banks Mortgage banks Savings and credit cooperatives Home savings banksa) Total
2001 14 2 183 199
2002 16 3 184 203
2003 20 3 176 199
2004 21 3 177 201
2005 20 3 173 196
2006 19 3 168 190
2007 20 3 156 179
2008 21 3 147 170
2009 22 3 137 162
2010 22 3 136 161
2011 25 3 132 2 162
2012 25 3 128 2 158
2013 26 3 123 2 154
2014 30 3 114 2 149
2015 30 3 91 2 126
2016 24 3 63 3 93
2017 23 3 21 3 50
2018 24 3 14 3 44
Half 1 2019 21 3 11 3 38
Half 2 2019 19 3 3 25

a) Between 2011 and 2015, the two home savings banks agreed to report their data on a separate line. The third home savings bank has been a data provider since 2016.

In the second half of 2019, out of the financial institutes engaged in residential housing loan activities, 19 banks, 3 mortgage banks and 3 home savings banks provided data. Due to mergers and liquidations in the savings co-operative sector, the number of data providers has been steadily declining in recent years, this trend has accelerated in the last four years. Compared to 2017, by the middle of 2019 their number dropped to almost half, then by the second half of 2019 the savings cooperative sector merged into Takarékbank Zrt.

Further information, data (links)

3.7.6. Housing loans

3.7.4. Housing loans (2001–)

Contact details:
Contact us!
Telephone: +36 (1) 345 6789