As you usually say time is money. This is true for investments, and it is also true for loans. In fact, we would not even think about the role that time plays in such a transaction. Especially now that the interest rates on the loans are really good for us.
Why is there a good time to borrow?
When we take out a loan, most of the time, we don’t speculate whether it will be worth it in 1-2 years, because we usually see an apartment or house and want to buy it. However, there are objective facts that are worth taking into consideration and, in some cases, urging you to borrow. This is one such date.
The first of these is that the central bank rate is currently extremely low at 0.9%. Because this is one component of interest rates on loans, this is important. Also, it is not expected to stay that way for long and loans will become more expensive.
In fact, access to credit will also become more difficult as of October 1, tightening is expected in Hungarian mortgage lending. See this article for details. But now the numbers should finally speak and let’s see what money shouldn’t fall!
A quick calculation
According to the loan calculator , if you borrow now, say a loan of HUF 16 million for 20 years, you can get quite a favorable offer. For example, here is the offer from Budapest Bank, which offers a monthly repayment of HUF 86,115 with a APR of 2.72% . And for the entire 20 years, we’ll be refunding the bank just over $ 20 million, exactly $ 20,696,480. In addition, you will now receive a $ 20,000 Elizabeth voucher as a gift if you choose this contract through us. Let’s have this as a starting point and let’s see how in some cases we are better off borrowing now! Interesting numbers follow, get ready, and then continue!
What if there is a slight increase in interest rates?
We are all well aware that the true cost of loans is interest, so a possible (and currently many sure) increase in interest rates may even affect our wallets in a sensitive way. Suppose the interest rate on the same Budapest Bank loan is only 1% higher.
In this case, with a 3.72% interest rate, the repayment of our loan is going to increase significantly, as the amount that we have to transfer monthly amounts to 94,612 HUF. This is exactly $ 8,497 more than the default loan, so if you were to buy it now. It is easy to calculate that due to the delay we will lose from 20 * 12 * 8,497 forints to 2,039,280 for 20 years.
This is even more serious when we borrow at a 6% interest rate . And this is not at all devilish, as in 2012, for example, it was, and even more than, the central bank base rate. So, with a 6% interest rate (within a couple of years), the monthly repayment would jump to $ 114,629. This is $ 28,514 more per month than your current monthly loan of $ 86,115. Over 20 years (hold on) $ 28 * 514 * 20 * 12 = $ 3,843,360. Rounding it out a little, it’s $ 7 million that you can fail if you don’t schedule in the near future, or take out your loan now, which you are planning anyway.
Therefore, it is not worth waiting too long, but do not rush because it can have serious financial consequences. Contact us! Our best professionals dedicate all their knowledge to making your real estate dream come true with the best possible credit.