Unlock the Secrets to Home Ownership in Hungary!

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Your dream home is closer than you think! Navigating the home loan process doesn’t have to be complicated. With our expert insights and step-by-step guidance, you can secure the best mortgage option and start your journey toward owning the perfect home in Hungary.

The two most crucial pillars when applying for a home loan are your income and your own resources. These factors play a significant role in determining both your eligibility for a loan and the amount you can borrow.

Each bank sets a minimum income threshold, usually at or above the minimum wage. However, many people are unaware that there are primary and secondary income sources. Banks expect the primary income to meet the minimum required amount. Once that’s fulfilled, secondary income can also be considered when determining how much monthly repayment you can afford.

Generally speaking, a minimum down payment of 20% is required for a home loan. This means that to purchase a property worth 20 million HUF, you’ll need to contribute at least 4 million HUF of your own funds.

Banks only accept properties located within Hungary that are owned by private individuals, free of any legal disputes, encumbrances, or claims. The property must be independent, marketable, and in good condition, with clear ownership status and finalized technical specifications.

It’s essential to understand how the loan amount is determined. The amount you can borrow largely depends on the location and quality of the property. In larger cities like Budapest, banks typically offer up to 80% of the property’s estimated market value as a loan. For smaller towns, however, this percentage tends to range between 50-70%. Keep in mind that the final loan amount is always at the bank’s discretion.

 

Otthon Start Program: nem mindegy, melyik bankhoz fordulunk

Costs Associated with Buying a Property

You can expect the following expenses when applying for a mortgage:

  • Legal fees: Typically 0.5-1% of the property’s value.
  • Bank fees:
    • Property valuation fee: Usually around 40,000-50,000 HUF.
    • Land registry document and map copy request fee: A few thousand HUF.
    • Disbursement fee: Around 0.5-1% of the loan amount.
    • Land registry registration fee: 12,600 HUF.

Fortunately, banks often offer promotions on these fees, so choosing the right bank can help minimize costs.

  • Notary fee: Varies depending on several factors, but due to bank promotions, it is typically under 100,000 HUF for a 15 million HUF loan, with higher amounts incurring higher costs.
  • Property acquisition tax: Generally 4% of the purchase price, but this can be reduced under certain conditions or waived entirely when applying for CSOK Plusz or rural CSOK.
Mortgage pre-approval options: How to secure your loan before signing the contract

Before signing the sales contract, it’s important to confirm that you meet the conditions for the mortgage with your chosen bank to avoid any surprises. You can choose from the following loan approval options:

  • Pre-approval: The bank will provide a certificate confirming your eligibility for a loan up to a certain amount, provided you find a suitable property (processing time is typically 1-3 weeks).
  • Pre-qualification: The bank officer enters your data into the system, and based on this, you’ll receive an estimated loan amount (this is not a binding offer).
  • Loan application without a sales contract: You can submit your full application to the bank before signing the sales contract.

The CSOK Plusz can be granted to foreign citizens during the period of their residence permit exceeding three months, provided they have a registered domestic address in Hungary. Bank practices vary when it comes to income acceptance, so it’s important to thoroughly check if you meet the conditions when applying for a subsidized loan.

The most important is having a registered address in Hungary, which must be verified with an official address card. Citizens of EU or EEA countries can obtain this card with a registration certificate, while non-EU/EEA nationals need a residence permit or permanent residency. Another essential document is the Hungarian tax ID card, which is also required for employment. This can be obtained online via the NAV portal with a 20T34 form and a digital government account, or by submitting the form in person or by mail, with processing taking up to 15 days.

Banks apply different rules, especially regarding employment contracts and eligible nationalities. Some may have strict requirements for fixed-term contracts, while others are more flexible. Additionally, not all banks lend to citizens of every country—some require a special credit assessment or may reject applicants based on nationality alone. This means that while one bank might approve a loan, another could decline it, even if the applicant meets income criteria.

You can expect the following expenses when applying for a mortgage:

  • Legal fees: Typically 0.5-1% of the property’s value.
  • Bank fees:
    • Property valuation fee: Usually around 40,000-50,000 HUF.
    • Land registry document and map copy request fee: A few thousand HUF.
    • Disbursement fee: Around 0.5-1% of the loan amount.
    • Land registry registration fee: 12,600 HUF.

Fortunately, banks often offer promotions on these fees, so choosing the right bank can help minimize costs.

  • Notary fee: Varies depending on several factors, but due to bank promotions, it is typically under 100,000 HUF for a 15 million HUF loan, with higher amounts incurring higher costs.
  • Property acquisition tax: Generally 4% of the purchase price, but this can be reduced under certain conditions or waived entirely when applying for CSOK Plusz or rural CSOK.

Before signing the sales contract, it’s important to confirm that you meet the conditions for the mortgage with your chosen bank to avoid any surprises. You can choose from the following loan approval options:

  • Pre-approval: The bank will provide a certificate confirming your eligibility for a loan up to a certain amount, provided you find a suitable property (processing time is typically 1-3 weeks).
  • Pre-qualification: The bank officer enters your data into the system, and based on this, you’ll receive an estimated loan amount (this is not a binding offer).
  • Loan application without a sales contract: You can submit your full application to the bank before signing the sales contract.

Foreign citizens can apply for the Baby Expectancy Loan (Babaváró Hitel) if they have a residence permit (with a stay exceeding three months), or if they have immigrant, settled, or stateless status. However, having a Hungarian address is crucial, and they must also meet the other personal and bank requirements for the loan.

The CSOK Plusz can be granted to foreign citizens during the period of their residence permit exceeding three months, provided they have a registered domestic address in Hungary. Bank practices vary when it comes to income acceptance, so it’s important to thoroughly check if you meet the conditions when applying for a subsidized loan.

A gift for savvy homebuyers

Buying property is an exciting journey that leads to your dream home and/or a long-term investment. It’s a milestone that could be one of the biggest decisions of your life. I know it’s easy to get lost on this path, as there are many “slippery spots” where you can stumble. That’s why we’ve created a groundbreaking resource to support you on your journey toward conscious home buying. We’d like to gift you with the Homebuyer’s Compass – the Property Purchase Checklist.

Feel free to use the checklist to dive into property buying well-prepared and with confidence. And remember, we’re here for you if you have any questions or need further assistance.

Take the First Step Today!

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