Home Start: Hungary's central bank decides on 10% equity requirement, income requirements will be tightened

Taking into account the elevated real estate market and related lending risks, and bearing in mind the insights gained from annual review meetings with credit institutions, the National Bank of Hungary (MNB) has decided to modify its macroprudential toolkit to target systemic risks in real estate lending.

The approved changes strengthen the resilience and financing structures of banks, mitigate the increase in systemic risks in the real estate market and support the smooth functioning of lending processes.

Given the significant increase in activity in the housing market and the risks surrounding the commercial real estate market, the MNB has decided to restructure the current systemic risk buffer requirement (SyRB) and apply it in a forward-looking, sector-specific manner.

Based on the amendment, the central bank will repeal the framework activated on 1 July 2024. From 1 January 2026 onwards, it will impose a 1% sectoral systemic risk capital buffer on exposures secured by a lien registered on residential or commercial real estate located in Hungary and held by domestic counterparties.

Given the continued strength of banks' capital positions and profitability, this measure is not expected to have a significant impact on lending capacity or conditions. Specifically, the requirement increases banks' resilience to shocks in segments affected by elevated risk.

As part of its annual review of debt brake regulations, the MNB decided to amend the debt brake rules in light of changing trends in the mortgage market, the increased lending of mortgages in connection with the Otthon Start (Home Start) Programme, and feedback from market participants.

Based on the amendment, the MNB will repeal the 41-year age limit stipulated in connection with the 90% loan-to-value ratio limit (requiring a minimum 10% own conribution) for first-time homebuyers, effective from the day following its publication in the Hungarian Gazette.

Removing the limit will support the smooth running of lending processes in a changing market environment. From December 2025, lenders will be required to identify first-time home buyers who are eligible for higher loan-to-value ratios by querying the property register. This will significantly reduce the administrative burden.

In addition, due to strong nominal wage growth in recent years, the MNB has

raised the income threshold, last modified in July 2023, from HUF 600,000 to HUF 800,000. This allows for a maximum debt-to-income ratio of 60%.

The income threshold will be raised from HUF 600,000 to HUF 800,000. The limit for small loans exempt from debt brake regulations will be raised from HUF 450,000 to HUF 550,000. Other technical amendments proposed by banks will also be implemented from 1 January 2026.

The MNB has also decided to tighten regulations to ensure stable financing for mortgage loans. From October 2026, the central bank will introduce measures under the mortgage loan financing compliance indicator (JMM) regulation to curb the purchase of mortgage bonds between banks.

In addition, newly issued mortgage bonds will be required to be listed on the stock exchange, and the maturity period of new stable sources will be extended. Furthermore, to reduce the burden on institutions with smaller portfolios, the HUF 40 billion threshold value applicable to mortgage loans, which constitutes an exception to the regulation, will increase to HUF 100 billion. Securities other than mortgage bonds covered by mortgages will also be accepted as stable sources.

Following the Financial Stability Council's decision, the decree amending the debt brake rules is expected to be published in the Hungarian Gazette in the coming days. Regarding the systemic risk capital buffer and mortgage loan financing compliance ratio regulations, the MNB will finalise the detailed rules in consultation with credit institutions in the coming weeks.

The MNB will publish details of the accepted amendments on the subpage for each instrument.

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