FIDESZ wants legislation on the conversion of foreign currency loans into forints to be tightened up so that banks will not be able “to evade their settlement obligations” towards borrowers, said Antal Rogán, the party’s parliamentary group leader. If banks are left too much room to decide how much interest to charge, lenders will try to evade their obligation to treat borrowers fairly by charging more interest on new forint loans, he said.
Fidesz wants to make the interest margin on conversions smaller so it is less likely that banks will claw back what is due to people under the intended law, Rogán said, adding that the interest margin should be narrowed to around 100 basis points. Further measures are also being proposed to provide guarantees to borrowers adopting the exchange-rate cap so as to ensure that repayments stay at a constant rate, he said. The aim is for the level of the cap, which is already lower than originally, to apply to new forint loans too, he added.
According to an amendment proposal passed by parliament’s legislative committee it will be optional to convert a foreign currency loan into a forint-based one in the case of loans maturing by the end of 2020. Previous proposal indicated that only loans expiring within a year would had been exempt from mandatory conversion. Another amendment to the original proposal provides for a more favourable interest rate once a loan is converted. The lower margin limit is 1% while the upper one is 4.5% for mortgages and 6.5% for other types of loan.
via hungarymatters.hu photo: Zoltán Máthé – MTI