The GFI announced new rules to tighten the debt brake rules on October 1. According to the new regulation, “the cheapest, variable-rate home loans will be available at twice the income limit, at half the amount of credit, or at a much longer maturity.”
However, ingenious clients have found a favorable way to counteract these changes, and even have a 0% interest rate mortgage.
According to the changes announced on June 18, the lowest and shortest (less than 5 years) interest rate mortgages can be claimed instead of the previous 50% with a repayment installment rate (JTM) of only 25%. This provision shall enter into force on 1 October 2018.
For those with an income of over 400,000 HUF, this limit will be 30% instead of 60%.
As an example:
- who, for example, has $ 240,000 in net legal income, and with a short interest period can only claim $ 60,000 in installments instead of $ 120,000.
Customers can adapt to the new rules in 4 sensible ways:
- Choosing a home loan with a higher repayment rate but with a fixed interest rate, a 5 or 10 year interest rate period because this is the primary objective of the GFI
- generating a higher income through part-time or secondary income.
- take a lower loan amount, so our installment payment will be lower.
- longer maturity, as this also means a lower installment.
We look into the possibility of a longer term:
It is not possible to shorten the long term only on paper, but there is a tricky solution to having an apartment savings contract with a home loan. At the end of the 4 year period, we will prepay our savings here and restart one or more LTP contracts. During the term, we continually prepay, or better still, repay our home loan.
These are two good ways to turn the debt brake rule to our advantage:
- we take out a longer-term home loan, but later “shorten” it by prepaying the LTP contract.
- with LTP, we get more from the financial system and the state than we pay.
In order to qualify for a “0” loan, there are three basic rules to follow:
- More and more family LTP contracts have to be concluded (volume effect),
- to be repaid every four years on our credit (time effect),
- we should choose a home loan with a lower interest rate (interest effect).
With a $ 240,000 income over a 20-year term, he takes a $ 10 million home loan for 20 years at the lowest available home loan interest rate of 2.5% today (with a 3-month interest period)
- this is combined with 3 LTP contracts with a monthly payment of 3,000 within the family
- LTP’s 4-year maturity expires, new ones (two of which will be repaid).
And here’s the point: Using the terms of a home savings fund with a $ 53,000 installment payment and a $ 60,000 LTP payment over 8 years, you can reduce your original 20-year term to 8 years by double repayments. can be used for residential purposes.
There are three important additions to follow to achieve this option. The 0% interest rate can only be solved with a low interest rate below 3.3%, with more LTPs within the family and with the constant and unchanged interest rate of our loan!
The current very low interest rate environment has made it possible to achieve a 0% home loan, which will cease with the rise in interest rates, but we have to bear in mind any interest environment that home savings plans can significantly reduce the overall maturity of your home loan and we can legally shorten the term, and benefit from it while complying with the new regulations!
It is also important to describe that you need to follow a stretched family budget over a shorter maturity, but wisely use the longer maturity to leverage your state-sponsored LTP to have a more favorable, predictable budget for your loan repayment period!
Big financial decision in everyone’s life
Home loan is a big financial decision in everyone’s life! All information on new family home improvement discounts and qualified home loans is available in one place upon request. We answer individual cases, explore the most important practical issues, and help adjust to the new GFIC. We will also help you to make Home Savings Cash!
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