The mortgage market has been in decline for the second month. The number of new contracts and the amount of borrowings are constantly decreasing. According to experts, the trend is due to the appearance of Baby Waiting Support.
According to data from the Horry Bank, this is the most popular form of credit since the introduction of the new element of the family support package. As a result, there was a decline in home mortgages. Compared to a year ago, mortgage loans fell by about 7%, while personal loans increased by about 25%.
Thus, the statistical figures show that the Baby Loan was primarily active in the housing loan market. However, in the opinion of credit institutions, this tendency may not be sustained in the long run.
What has happened to Baby Waiting Support since its introduction?
As the MNB classifies the Baby Waiting Support in its statistical statements as commodity and other loans, it is no wonder that this segment saw an increase of more than 500% compared to the previous year. In July alone, HUF 54 billion was disbursed from the Baby Waiting Loan. The popularity of the product is not surprising because, under the terms and conditions set forth in the legislation, the Baby Waiting Support can be a non-interest bearing loan or even become a government grant. In an earlier article, you can read about the Baby Waiting Support Terms and Conditions.
Due to favorable conditions, the MNB expects to disburse approximately HUF 400 billion in the first year.
Is Baby Waiting Support Really Popular?
According to the MNB, the Baby Waiting Support is extremely popular. The vast majority of applicants claim a maximum of $ 10 million for the maximum allowed term of 20 years. This figure is not surprising either. as Baby Waiting Support is only available once, so if you do not claim the maximum amount, you will not be able to use the difference between the amount borrowed and the maximum amount allowed by law.
Can Baby Loads Suppress Home Loans?
Experts do not expect the Baby Waiting Support to push home loans out of the market. They will rather serve as a supplement to these types of loans, as Baby Waiting Support can also be used as a self-financing purchase. In this way, families who lacked the self-sufficiency to create their own home would be able to buy an independent home or home.
What are the disadvantages of expecting a baby?
We would, however, like to highlight a risk associated with Baby Waiting Support. If the couple does not have a child within the first 5 years after applying for the Baby Loan, the interest-free loan becomes interest-bearing. Moreover, unpaid interest will be charged retroactively for the first 5 years of the interest-free period. Thus, it is not always good for home loans.
If you are interested in Baby Waiting Support or would like to know what home loan options are available in the market, please fill out our form our credit broker will be looking for soon.