The housing loan stock of over HUF 4000 billion as of 31 December 2020 was 10% higher than in 2019 and accounted for 8.4% of GDP. Both the number of approvals and disbursements decreased, while their amounts increased. With the dominance of loans for the purchase of second-hand dwellings, the weight of lending for new dwellings has decreased. The number of CSOK grants increased by 18% and their amount by 29%. The moratorium on repayments introduced to mitigate the effects of the epidemic was used for 43% of housing loans.
At 31 December 2020, the stock of housing loans in Hungary stood at HUF 4004 billion, 10% (HUF 373 billion) higher than at the end of 2019. It accounted for nearly 49% of loans to the household sector and its share of GDP increased to 8.4% from 7.8% at the end of the previous year.
The increase in the stock of loans over the past year affected both state-subsidised and market loans: compared to the same period last year, the stock of state-subsidised housing loans increased by 9.1% and that of unsubsidised loans by 10%, while their share in the total loan stock remained unchanged (16% and 84% respectively).
The savings and credit cooperatives disbursed 3.0% of the total housing loan portfolio in the first half of 2019, and in the second half of 2019 they were merged into Takarékbank Zrt., so their loan portfolio was in the banks' portfolio in 2020. Accordingly, the banks' share of total housing loans increased in 2020, reaching 58%. There was no significant shift for mortgage banks and home savings banks, with their shares standing at 29% and 12% respectively at the end of 2020.
Stock of housing loans by borrower, 31 December 2020
|Credit institution||Number of housing loans||Amount of housing loans, HUF billion|
|Banks||324 063||2 327|
|Mortgage banks||212 134||1 178|
|Home savings banks||131 503||499|
|Total||667 700||4 004|
The share of problem-free loans has increased steadily since 2015, from 86% in 2015 to 97% in 2019 and to more than 97% in 2020. The non-performing exposure ratio (2.4% in 2020) has also improved compared to a year earlier (2.7%). The number of non-performing loans fell from 18,000 in the same period of the previous year to 16,000 at the end of 2020. Restructured housing loans accounted for 0.8% of performing loans, with 30% of non-performing loans restructured.
In March 2020, a moratorium on repaymentsGovernment Decree 47/2020 (18.III.) on immediate measures to mitigate the impact of the pandemic caused by the coronavirus on the national economy suspended the repayment of household loans until the end of 2020. The moratorium was later extended by six months. was introduced to mitigate the effects of the coronavirus epidemic, which was applied to 43% of housing loans between March and end-December 2020, or around 286,000 cases. The loans concerned amounted to HUF 1 803 billion, representing 45% of the housing loan portfolio. Of the stock affected by the moratorium, 53% was applied for at banks, 38% at mortgage banks and 8.9% at home savings banks.
The increase in the stock of housing loans was largely due to the fact that the repayment of instalments not paid because of the moratorium and the fact that the maturity of maturing loans was postponed, so that their amount did not reduce the stock of housing loans(https://www.mnb.hu/letoltes/penzugyi-stabilitasi-jelentes-2020-november.pdf)..
Stock of housing loans subject to repayment moratorium, 31 December 2020
|Credit institute||Number of home loans||Amount of home loans, billion forints|
|Mortgage banks||122 402||688|
|Home savings banks||38 508||161|
|Total||285 599||1 803|
In 2020, 90,000 housing loans were approved, worth HUF 918 billion. Compared to the same period in 2019, the number of approved loans decreased by 6.7%, while their amount increased by 1.2%. The average amount of a loan per authorisation reached HUF 10.2 million at the end of December 2020, HUF 800 thousand more than at the end of 2019.
Among the approved housing loans, the number of state-subsidised loans increased by 41% and their amount by 16%, while the average loan amount decreased from HUF 10.1 million a year earlier to HUF 8.3 million.
Several measures contributed to the increase in subsidised housing loans:
- From the end of 2018, the amount of family home creation grant (CSOK) available for new housing increased and the number of eligible beneficiaries was also widened.
- From July 2019, the CSOK subsidised loan scheme became available for the purchase of second-hand housing, and the HUF 35 million threshold was abolished, making subsidised loans available to a wider range of applicants in large cities.
- At the same time, a Village CSOK was also launched, which offers a combined subsidised loan for the purchase and renovation of housing.
The number of approved loans without state support decreased by 14% and their amount by 1.3%, while their average amount increased from HUF 9.3 million in 2019 to HUF 10.6 million.
Due to the opposite trend in the approval of subsidised and unsubsidised loans, there was a significant shift in favour of state-subsidised loans: while in 2019 the proportion of subsidised loans was 13%, this has changed to 20% in 2020. In terms of total value, the weight of subsidised loans increased from 14% to 16%.
In 2020, no foreign currency housing loans were approved by credit institutions.
Housing loans approved, 2020
|Type of housing loan||Number of housing loans||Amount of housing loans, billion HUF|
In 2020, more than 104,000 housing loans were disbursed for a total of HUF 917 billion. The number of disbursed loans decreased by 6.6%, while their amount increased slightly (4.6%) compared to the same period of the previous year.
- Housing loans continued to be dominated by loans for the purchase of second-hand dwellings, accounting for 58% of the number of loans disbursed and 69% of the amount. In 2020, the number of loans disbursed for the purchase of second-hand dwellings decreased by 4.9% and their amount increased by 6.1% compared to the same period of the previous year. The average loan amount increased from HUF 9.4 million a year earlier to HUF 10.5 million.
- The number of loans for construction decreased by 9.7% and their amount by 9.8% compared to 2019. The average loan amount was unchanged at HUF 4.5 million. The number of loans for the purchase of new homes decreased by 14%, but their amount increased by more than 4.7%. The average loan disbursed for this purpose was HUF 13.8 million, up HUF 2.4 million from a year earlier. The weight of lending for new housing decreased slightly in 2020. The aggregate value of loans for the construction and purchase of new dwellings is 30% of the amount of loans for the purchase of second-hand dwellings, a decrease of 2 percentage points compared to the previous year.
- The number of loans for modernisation and extension increased by 8.6% in 2020, and their aggregate value decreased by 15% compared to a year earlier, while the average loan amount decreased from HUF 4.2 million to HUF 3.3 million.
- The number of smaller loan redemptions was 43% lower and their amount two-fifths higher compared to the same period last year, while the average loan amount increased to HUF 9.2 million.
Housing loans disbursed by purpose and credit institution, 2020
|Denomination||Banks||Mortgage banks||Home savings banks||Total|
|Number of loans|
|Construction||4 623||11 876||874||17 373|
|Buying a new home||3 767||3 422||869||8 058|
|Buying a second-hand home||31 964||16 861||11 861||60 686|
|Modernisation||1 182||1 460||8 700||11 342|
|Loan refinance||1 448||–||1 691||3 139|
|Other purposes||1 329||376||169||1 874|
|Total||45 055||34 475||24 492||104 022|
|Volume of loans, HUF million|
|Construction||32 945||40 649||5 145||78 739|
|Buying a new home||55 007||51 587||4 821||111 415|
|Buying a second-hand home||385 140||193 598||57 329||636 067|
|Modernisation||8 793||3 135||24 003||35 931|
|Extension||3 516||1 655||1 025||6 196|
|Loan refinance||21 899||–||7 108||29 007|
|Other purposes||13 941||5 092||382||19 415|
|Total||521 241||295 716||99 813||916 770|
In the period from January 2016 to December 2020, the number of family home creation grants disbursed by credit institutions was nearly 156,000, amounting to HUF 386 billion. The average amount per disbursement was HUF 2.5 million. A total of 54,000 CSOK grants were paid for the construction and purchase of new housing, accounting for more than 34% of all cases. At the same time, 55% of the total amount of grants allocated was used to purchase new housing.
Family home creation grants by purpose, 2016-2020
|number, grants||volume, HUF billion|
|Building a new home||37 354||111.6|
|Buying a new home||16 873||98.9|
|Buying a second-hand home||92 264||162.9|
|Home extension||9 332||12.7|
Of the 655,000 housing transactions between 2016 and 2019, on average nearly one in six benefited from the CSOK. The share of grant users is estimated at 42% for new home buyers and 12% for second-hand home buyers.
In 2020, the number of grants paid out increased by 18% and their amount by 29% compared to the same period of the previous year, as a result of the aforementioned measures expanding the CSOK.
Family home creation grants
|Number of disbursements||Amount of disbursements HUF billion|
In 2020, more than half of the grants (59%) were used to buy second-hand housing and 27% to build or buy new housing. Nearly two fifths of the total value of the grants paid was for new housing.
Average amount per disbursement in 2020
- HUF 3.2 million for new housing,
- HUF 5.7 million for the purchase of a new dwelling,
- HUF 2.4 million for second-hand housing.
The share of grants used for housing extension has been steadily increasing over the last two years, and by the end of 2020 it exceeded 14%. The average amount disbursed for this purpose was HUF 1.6 million. In 2020, the number of grants used for renovation and extension nearly tripled, and their amount jumped sixfold compared to the same period of the previous year, in connection with the introduction of the Village CSOK in 2019, where applicants can use half of the grants for housing extension and renovation.
In 2020, banks disbursed more than 99% of the CSOK amount, while 0.3% of the amount reached the beneficiaries through mortgage banks.
It is also worth mentioning from the point of view of the development of housing lending that the baby loan became available from 1 July 2019, which is a free-use loan product that can be applied for under certain conditions. Around 120,000 such contracts worth HUF 1,090 billion were signed between July 2019 and December 2020. Borrowers can take out this loan for a wide range of purposes, but it is assumed that a significant proportion of them will use it for housing investment, to supplement the purchase price of a home, to replace a market mortgage or to prepay a previously taken out home loan.
:↑ Government Decree 47/2020 (18.III.) on immediate measures to mitigate the impact of the pandemic caused by the coronavirus on the national economy suspended the repayment of household loans until the end of 2020. The moratorium was later extended by six months.