Although there are many bank offers to choose from, most forint foreign currency lenders are still unable to decide whether or not to replace their forint foreign currency loans.
The overwhelming majority of debtors have had a few weeks to get a free loan redemption, but the question arises whether everyone is worth the urge of banks and the press.
Or it is better to calculate, in a relaxed, relaxed manner, with the help of a specialist , which construction is better for whom.
Good Finance’s team will guide you through what to look for in banks’ promising deals on forint currency loans. Transparency of instant money offers and the positives and negatives of currently available schemes is almost impossible without an independent credit intermediary.
Trying to lure customers who are more promising in their offers
Commercial banks, overstating each other, are trying to lure customers who are more promising in their offers, and that is why we would like to outline the factors that should be taken into consideration in order not to regret our choices in the long run.
One of the key considerations when redeeming forint foreign currency loans is whether or not you have a fixed or variable rate loan
One of the biggest questions when deciding to replace forint foreign currency loans is with a floating rate loan (as is the case with forint loans), we minimize our installments over the relatively short term and take the risk that the benchmark interest rate (3-month BUBOR) may go up significantly in 2-3 years, which will significantly increase the monthly or
• choose to fix your monthly repayment on a fixed rate loan for 5-10 years (possibly longer), at an average 2% higher than current interest rates, while protecting yourself from any significant upturn in 2-3 or 6-8 years from the effects of interest rate increases.
If we opt for floating interest rates , in the current interest rate environment, a repayment installment on a medium-sized loan (a $ 5 million debt, a 12-year remaining term, and a 6% APR) could save about $ 5,000 a month .
And if we choose a fixed interest rate for a longer interest period, we would pay a slightly higher installment than at present, but over the duration of the fixation, our burdens will be predictable, predictable and will not be affected by central bank base rate movements.
The most common fixed rate period is five years, but it is possible to fix the interest rate for a loan for 10 years or even for the entire term.
How do I decide? Who can help?
As the central bank base rate is currently at a record low level, while borrowing may be favorable, this cheapness may backfire on floating-rate loans in the event of a sharp rise in the base rate.
In the case of fixed rate contracts, this may not occur within the fixed period.
In support of this, looking at the historical data on the central bank base rate over the last 10 years, we can see that only 2013 saw interest rates above 5%, which was 3.5% higher than the current rate.
Let’s be realistic! At the current base rate level
There is not too much reserve for the decline, so the risk that this reference rate will increase is much higher.
According to our numerical example above, if the base rate were to suddenly rise to 6%, for example, our installment would also increase significantly, as banks would not reduce their interest rate benefit to zero, just to avoid increasing the customer’s installment. So staying with our numerical example would mean that the approx. Our monthly installment of HUF 38,000 is approx. It would increase to 48 thousand HUF. That would mean an increase of about 25 percent.
To sum up, call our experts to decide which construction is best for you and which bank you can partner with if you decide to replace your forint currency loan.