Economy 3 December 2025, 3:52pm

Thanks, Home Start: Hungarians have never borrowed so much before

Portfolio

According to data published by the Hungarian central bank (MNB) on Wednesday, the first two months of the Home Start scheme saw HUF 205 billion worth of loans taken out, representing almost 6,000 contracts, most of which were signed by borrowers in October. Thanks to the loan programme offering a fixed 3% interest rate, October saw an unprecedented HUF 418 billion in retail lending. However, behind these records lies a backlog of loan applications. Meanwhile, corporate lending is showing a different picture: for the first time since 2016, companies' total loan portfolio has decreased year-on-year.

According to recent figures from the National Bank of Hungary, the Home Start Programme, launched on 1 September, generated contracts worth HUF 205 billion by the end of October, surpassing Portfolio's initial forecast of HUF 190 billion. Of this, contracts worth HUF 183 billion were signed in October, setting an absolute nominal record for mortgage lending of HUF 258 billion per month, 71% of which was accounted for by Home Start.

The graph above shows that this was due to lower borrowing in August and September, when potential borrowers put their plans on hold. Bank processing times also meant that some contracts planned for this period were delayed until October.

Therefore, it is worth comparing the last three months with the previous three months. We can see that there has only been a 6% increase in volume, while the number of contracts has decreased by 5%.

We cannot yet speak of a downward trend in borrowing, as November could see even greater disbursement than in October. Nevertheless, the decline in the number of contracts between August and October compared to May–July is an interesting development that can presumably be partly explained by the banks' administrative capacity.

Home Start has therefore primarily increased the average loan amount, rather than the number of borrowers. In August, the average mortgage was HUF 18.7 million; by October, this figure had risen to HUF 26.6 million. According to our market information, Home Start's average loan amount is around HUF 34 million, resulting in almost 6,000 contracts in the first two months (the graph below shows total home loans).

Overall, the volume of mortgage lending has grown by 27% so far this year. Personal loans have increased by 37%, while baby loans have decreased by 9%. Total household lending is 29% higher than in the first 10 months of last year.

So far, Home Start has stimulated the market for second-hand homes. After a long period, the proportion of newly built homes financed through mortgages has fallen below 10%.

The distribution by interest period reveals how the underlying interest subsidies work: while CSOK Plus is granted with an initial annual interest (subsidy) period, Home Start offers a five-year period.

There has been no significant change in market mortgage rates, with households taking out loans at an average interest rate of 6.5% in October.

On the other hand, personal loans are becoming cheaper. In October, their average APR was just 15.3%, compared to 17.0% a year earlier.

At the end of October, the total bank loan portfolio of households stood at HUF 12,234 billion, representing a year-on-year increase of 12%. Mortgage loans grew by 15%, while personal loan debts increased by 18%.

October was a weak month for deposits, with households withdrawing more money from their accounts than they deposited. While the exact reason is unclear, it is possible that much of the approximately HUF 400 billion in BMÁP (Bonus Hungarian Government Security) capital and interest, which was paid out at the end of September, was invested in other instruments the following month.

There has been no significant change in interest rates either: for example, the population receives an average annual interest rate of only 1.43% on their total fixed-term deposits, whereas the rate for new fixed-term deposits is 3.78%.

Although household deposits increased by almost 9% over the course of a year, a slight decline has been observed over the past six months.

Although retail lending is booming, negative trends have intensified in corporate lending. The 3% interest rate introduced on 6 October has not yet 'trickled down' to the statistics for liquidity loans under the Széchenyi Card Programme. According to MNB data, at least, companies repaid more loans in October than they took out.

Although corporate lending showed a positive balance of HUF 345 billion on a transaction basis over the past year (with companies taking out more loans than they repaid), corporate debt decreased due to revaluation and other volume-related factors.

In addition to the weak appetite for investment loans, the strengthening of the Hungarian forint has certainly contributed to the 0.4% decline in corporate lending over the past year. According to data from the National Bank of Hungary, corporate lending last declined on an annual basis in 2016.