Renewal loan: Viktor Orbán announcement details have been published, there are many pitfalls

That the new interest-subsidized renovation loan does not provide such a financial advantage over home renovation mortgages that are still available on the market today, we discuss in our article below. For an amount of 6 million, a maturity of 10 years and an interest rate of 3% the loan installment is 58,000 HUF until the renewal support is used. You can remove less than half of this by paying it upfront.

Home Renovation Loan Details Released

641/2020. The government decree on the loan for home renovation with subsidized interest was published in the latest Hungarian Gazette. The regulation is based on the CSOK rules, more precisely the CSOK loan, that is

The Home Renovation Loan as of Feb 1, 2021 will be similar to the 3% CSOK Loan: Banks can charge 130% of the 5-year average GDMA yield + 3 percentage points, but the higher than 3 % is borne by the state, the interest paid by the client is 3% by default.

• creditors are entitled to a refund of 1.5% of the loan amount for home renovation by the borrower, provided that the brokerage commission payable to his financial intermediary does not exceed 0.8% (in the case of the maximum amount of 6 million, this means a reimbursement of 90 thousand HUF – ed.),
• the home renovation loan it is considered a mortgage loan from a credit institution (i.e. a notary, the appraiser is expected to be used – ed.), and
• then someone can pick it up if you qualify for a new home renovation grant of up to $ 3 million (Child under 25 years of age living together, 1 year legal relationship, public debt exemption, etc. – ed.), The relevant documents must be attached to the loan application to prove it,
• If, on the basis of the submitted application and its annexes, the credit institution establishes that the applicant meets the conditions of the interest discount at the time of submitting the application, it will enter into a grant agreement with the applicant on the use of the interest bonus,
• the home renovation loan the amount cannot exceed 6,000,000 HUF, to pay interest, the state pays the interest subsidy throughout the term of the loan, for up to 10 years provides
• the credit institution will not be able to charge a fee or other costs to the beneficiary for the advance payment of the support for the home renovation, in which case the credit institution will not charge a fee or other costs within 10 days after the credit with unchanged expiration, recalculates the monthly payments of the beneficiaryand notifies the beneficiary and the Treasury,
• payment of bills issued by the borrower in connection with the construction activities carried out with the home renovation loan within one year from the loan disbursement, presenting the invoices or a copy of them to the credit institution (i.e., care must be taken to ensure that planned work is completed within one year, as we write here – ed.)
• if it is not fulfilled, or the borrower loses his right to renewal support, or if the assumed renewal support does not reach 25% of the loan amount (i.e. 1.5 million HUF in the case of a loan of 6 million), then

the interest subsidy on the remaining loan amount ends (the interest rate jumps above 5.1% based on the current situation), the interest subsidy used so far must be repaid to the Treasury in a single installment within 60 days after the termination of the right (stillbirth or the case of the death of a child is an exception).

• however, if the conditions are met, once the home renovation allowance is paid, the credit institution Within 4 days in a single amount, as a prepayment to the beneficiary’s credit account with a credit institution, up to the amount of the loan pending home renovation.

The regulation on rehabilitation aid is also changing

The Regulation itself on aid for home renovation has also been modified, for example:

• if the parents’ place of residence is not the same, then a parent who has at least one child in common is entitled to the benefit, if no common child is domiciled by the other parent,
• both parents the amount of support Entitled to a 50% rate, if you both have the same place of residence as at least one of your children,
• this does not apply to those parents, whose place of residence is another child other than the one mentioned in paragraph 3, and the other parent of that child a) also has the same place of residence (for example, lives with his new partner and common child), or b) has a different place of residence, but none of your common children have a place of residence,
• In addition to the works listed above, the grant may require the installation or replacement of lamps or luminaires and the design, upgrade or replacement of components of a domestic hot water system, including the use of renewable energy sources,
• installation or replacement of a solar system in the case of a certification invoice, the total cost of the materials and related business fees stated therein cannot exceed the gross amount of HUF 450,000 / kWp,
• He clarified that the aid was granted after the completion of the housing construction activities and the payment of the bills Can be requested within 60 days, but no later than December 31, 2022. In the case of several invoices, the calculation of the application period will be based on the last payment date,
• In the case of a home renovation loan, the grant application can be submitted as of March 1, 2021, and in the case of a home renovation loan, the loan agreement must be attached,
• not only minors must have lived in assisted living for at least one year, but also adults, the word ‘minor’ was removed from the regulation for this section (the age limit for the child remains unchanged at 25 for the application.

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