The HUF 4.6 billion housing loan stock at the end of 2021, which accounted for 8.3% of GDP, exceeded the 2010 peak in nominal terms. Both the number and amount of approvals and disbursements increased, with those for housing modernisation being particularly strong. The availability of the moratorium on repaymentsGovernment Decree 47/2020 (18.III.) on immediate measures to mitigate the impact of the Covid19 epidemic on the national economy suspended the repayment of household loans until the end of 2020. Later, the moratorium was extended several times, and from November 2021 the general moratorium on repayments was lifted, leaving the option available only for certain households in need (pensioners, child-rearing households, public workers and those whose income had been reduced by the epidemic). The moratorium on repayments delayed the closure of maturing loans, so that their amount did not reduce the stock of housing loans., introduced to mitigate the effects of the epidemic, was tightened in the second half of 2021, with only 6.8% of housing loans benefiting from it, down from 29% in the first half of the year.
Increase in the stock of housing loans
As of 31 December 2021, the stock of housing loans in Hungary stood at HUF 4,585 billion, 15% (HUF 581 billion) higher than at the end of 2020, and in nominal terms above the peak of 2010. Its share in loans to the household sector has fallen from 57% to 49% over the last three years, since the introduction of the baby grant. The ratio of housing loans to GDP is 8.3%, slightly lower than the previous year (8.4%).
Newly disbursed loans have played an increasingly important role in the growth of the stock of housing loans, but outstanding debts due to the moratorium on repayments have continued to contribute to the increase.
In 2021, the stock of state-subsidised housing loans increased by 18% and that of unsubsidised loans by 14% year-on-year, while their share in the total stock of housing loans remained broadly unchanged (17% and 83% respectively).
In 2021, banks' share of total housing loans reached 59%. Mortgage banks and home savings banks did not change significantly, with shares of 30% and 11% respectively.
Stock of housing loans by lender, 31 December 2021
|Credit institution||Number of housing loans||Amount of housing loans, HUF billion|
|Bank||334 472||2 688|
|Mortgage banks||221 044||1 373|
|Home savings banks||126 373||525|
|Total||681 889||4 585|
The share of problem-free loans rose from 86% to 97% between 2015 and 2020, falling to 96% in 2021. By the end of 2021, the non-performing exposure ratio had increased to 3.7% from 2.4% a year earlier. The number of non-performing loans increased to 25,000 from 16,000 in the same period last year. Restructured housing loans accounted for 7.7% of performing loans, with 48% of non-performing loans restructured. This is a significant increase compared to 0.8% and 30% in 2020 and is linked to the partial phasing out of the repayment moratorium.
The repayment moratorium was used in 29% of housing loans until mid-2021, in around 195,000 cases. The amount of loans affected at the end of the first half of the year was HUF 1 290 billion, equivalent to 30% of the stock of housing loans. As a result of the November measures limiting the availability of the moratorium, by the end of 2021 the number of housing loans covered by the moratorium had fallen to 46 thousand and the value to HUF 309 billion, so that at the end of the year the moratorium affected only 6.8% of all housing loans and 6.7% of the housing loan stock. At the end of the year, the share of the stock affected by the moratorium was 6.4% for banks, 8.4% for mortgage banks and 4.3% for home savings banks.
Stock of housing loans affected by the moratorium
|Credit institution||Number of housing loans||Amount of housing loans, HUF billion||Number of housing loans||Amount of housing loans, HUF billion|
|31 December 2020||31 December 2021|
|Bank||124 689||953.8||25 515||171.0|
|Mortgage banks||122 402||688.4||16 782||115.5|
|Home savings banks||38 508||161.0||4 023||22.6|
|Total||285 599||1 803.2||46 320||309.1|
Dynamic increase in the amount of loans authorised
In 2021, 110,000 housing loans were approved, worth HUF 1308 billion. Compared to the same period in 2020, the number of loans approved increased by 22% and their amount by 43%. The former was higher than at any time since 2008, but still well below the lending records of the early 2000s - nearly 200,000 loans were approved at the peak in 2003.
Both the expanded home creation grants and the Green Home Programme, launched in October, played a role in the housing credit boom. The average loan per approval reached HUF 11.9 million in 2021. This is HUF 1.7 million more than in 2020.
Among the approved housing loans, the number of state-subsidised loans increased by 75% and their amount by 65%, while the average loan amount decreased from HUF 8.3 million a year earlier to HUF 7.9 million. In addition to existing grants, several elements of the new home loan scheme launched at the beginning of the year contributed directly or indirectly to the increase in subsidised housing loans:
- VAT on new homes has been restored to 5% until 31 December 2022,
- buyers with CSOK can also benefit from additional VAT refund possibilities,
- notary fees have been reduced,
- certain building procedures has been simplified, and
- the tightening of energy standards for new homes has been postponed until 30 June 2022.
The number of loans approved without state aid increased by 8.7%, the total value by 38%, and the average loan size also increased from HUF 10.6 million in 2020 to HUF 13.5 million.
The faster growth in subsidised housing lending has led to an increase in the share of subsidised loans in total loans approved from 20% to 29% compared to the previous year. At the same time, the share of subsidised loans in the total value of housing loans increased from 16% to 19%.
Housing loans approved, 2021
|Type of housing loan||Number of housing loans||Amount of housing loans billion HUF|
|Non-subsidized||78 480||1 062|
|Total||109 884||1 308|
Most loans were disbursed for the purchase of second-hand housing
In 2021, more than 121,000 housing loans were disbursed, for a total of HUF 1,249 billion. The number of loans disbursed increased by 17% and their amount by 36% compared to the same period last year.
- Housing loans continued to be dominated by loans for the purchase of second-hand dwellings, accountingfor 59% of the number of loans disbursed and 69% of the amount. In 2021, the number of loans disbursed for the purchase of second-hand dwellings increased by 19% and the amount by 35% compared to the same period of the previous year. The average loan amount increased from HUF 10.5 million a year earlier to HUF 11.9 million, in line with the rise in prices of second-hand housing.
- The number of loans for construction decreased by 22%, while their amount increased by 2.1% compared to 2020. The average loan amount increased by HUF 1.4 million to HUF 5.9 million. The number of loans for the purchase of new homes increased moderately (4.5%), but their amount increased by almost 22%. The average loan disbursed for this purpose was HUF 16.1 million, up by HUF 2.3 million compared to a year earlier. In 2021, the weight of lending for new dwellings decreased. The amount spent on the construction and purchase of new dwellings fell to 17% of total housing lending, down from 21% the year before.
- The number of modernisation and extension loans increased by 76% in 2021, with the total value nearly tripling compared to a year earlier, due to the impact of housing renovation grants up to HUF 3 million and related pre-financing loans, while the average loan amount increased from HUF 3.3 million to HUF 5.2 million. The amount of loans disbursed for this purpose as a share of total housing lending approached 10%, up from 4.6% the previous year.
- The number of refinance loans, which accounted for a smaller share, increased by 11% and their amount by 48% compared to the same period last year, while the average loan amount rose to HUF 12.3 million.
Loans disbursed for housing purposes by purpose and by lending institution, 2021
|Denomination||Banks||Mortgage banks||Home savings banks||Total|
|Number of loans|
|Construction||3 674||9 116||804||13 594|
|Buying a new home||4 294||3 375||751||8 420|
|Buying a second-hand home||36 912||23 972||11 197||72 081|
|Modernisation||5 661||7 262||8 335||21 258|
|Loan refinance||2 143||–||1 354||3 497|
|Other purposes||639||284||126||1 049|
|Total||54 021||44 439||22 887||121 347|
|Volume of loans, HUF million|
|Construction||34 181||40 421||5 794||80 396|
|Buying a new home||73 239||57 702||4 668||135 609|
|Buying a second-hand home||552 883||243 844||61 051||857 778|
|Modernisation||46 104||31 911||34 349||112 364|
|Extension||3 394||1 722||1 240||6 356|
|Loan refinance||35 983||–||6 900||42 883|
|Other purposes||9 061||3 845||286||13 192|
|Total||754 845||379 445||114 288||1 248 578|
Disbursements of CSOK grants have slowed down
In the period from January 2016 to December 2021, the number of family home creation grants disbursed by credit institutions was nearly 192,000, amounting to HUF 467 billion. The average amount per disbursement was HUF 2.4 million. A total of 62,000 grants were paid for the construction and purchase of a new home, accounting for 33% of all cases. At the same time, 51% of the total amount of grants allocated was used for the purchase of new housing.
Family home creation grants by purpose, 2016–2021
|number, grants||volume, HUF billion|
|Building a new home||41 464||121.6|
|Buying a new home||20 987||114.7|
|Buying a second-hand home||114 704||209.6|
|Home extension||14 697||21.5|
Of the 972,000 housing transactions carried out between 2016 and 2021, on average one in five benefited from the CSOK or the rural CSOK. The share of subsidy users is estimated at 34% among new home buyers and 13% among second-hand home buyers. In 2021, the number of grants paid out increased by 3.6% and their amount decreased by 12% compared to the same period of the previous year.
Family home creation grants
|number, grants||volume, HUF billion|
In 2021, 65% of grants were used to buy second-hand housing and 24% to build new housing. However, the share of new housing is higher in terms of the value of grants paid (36%).
Average amount of CSOK per disbursement in 2021:
- HUF 3.0 million for new housing,
- HUF 4.1 million for the purchase of a new dwelling,
- HUF 2.0 million for the purchase of a second-hand dwelling.
The share of CSOK grants for housing extension has been steadily increasing over the last two years, reaching close to 15% by the end of 2020 and then declining to 12% in 2021. The average amount of grants paid for this purpose was HUF 1.6 million. In 2021, the number and amount of grants for renovation and extension of housing was lower than in the same period of the previous year, but still many times higher than in the years before the introduction of the rural CSOK. The continued availability of the rural CSOK for housing extension and renovation, but its declining uptake is mainly linked to the lack of capacity of contractors and the rising prices of building materials.
In 2021, banks disbursed more than 99% of the CSOK amount, while 0.1% of the amount reached the beneficiaries through mortgage banks.
The baby loan, available from the second half of 2019, indirectly curbed the growth of housing lending, with a total of HUF 505 billion taken up in 2021, according to the Magyar Nemzeti Bank (MNB, National Bank of Hungary). The baby loan, which accounts for nearly 17% of total household loans, was largely used for housing purposes, thus moderating the demand for housing loans.
:↑ Government Decree 47/2020 (18.III.) on immediate measures to mitigate the impact of the Covid19 epidemic on the national economy suspended the repayment of household loans until the end of 2020. Later, the moratorium was extended several times, and from November 2021 the general moratorium on repayments was lifted, leaving the option available only for certain households in need (pensioners, child-rearing households, public workers and those whose income had been reduced by the epidemic). The moratorium on repayments delayed the closure of maturing loans, so that their amount did not reduce the stock of housing loans.