Working Abroad but Want to Buy Property in Hungary?

Whatever the reason for moving abroad as a Hungarian, sooner or later many people are faced with the idea that they would like to buy property in Hungary — whether as an investment or as a future home — but may not have the full purchase price available in cash. What options are available to them?

Taking Out a Loan from a Foreign Bank? In Principle, Possible.

Hungarians working in the euro area will certainly be aware that interest rates on euro loans are at historic lows, which means that they may obtain financing from their own bank — for example, a German, Austrian or Swiss bank — on very favourable terms. In the case of larger amounts, however, banks often accept — or rather prefer to accept — as collateral real estate located in their own country or, especially in the case of regional savings banks, within their own operating area. If, for example, you own property in Germany and are willing to encumber it, you may obtain a euro loan at very low cost. If you do not own such property, or do not wish to encumber it, it is still worth asking your bank adviser, as exceptions may be possible.

Hungarian Mortgage with Foreign Income? Generally, This Is Also Not a Problem.

In principle, Hungarian banks should not discriminate against you merely because you have foreign income or a foreign salary. Naturally, bank officers tend to be more cautious in such cases. You should therefore expect to provide certified translations and, where applicable, tax authority certificates. However, people earning income abroad have one clear advantage: in Hungary, proof of income above HUF 250,000 net generally results in more favourable loan conditions. For most people working in the euro area, this should not be a significant obstacle.

Typically, Hungarian banks finance 70% of the purchase price of the property and require a 20–30% own contribution. Raising this portion can often also be arranged through the foreign account-holding bank, in many cases even without collateral.

What you must pay particular attention to in such cases, however, is the fluctuation of the forint-euro exchange rate. Due to the foreign-currency loan scandals of recent years, banks are now almost exclusively willing to disburse loans in forints. The trend of recent decades, however, shows a tendency towards depreciation of the forint. Nevertheless, it is worth carefully considering the risks of taking out a loan in a different currency.