MSZP: Everybody should weigh up the pros and cons of fixed exchange rates

According to MSZP, it is an extremely important question whether troubled borrowers with mortgages denominated in foreign currencies should ask their banks for taking up fixed exchange rates or not. Mortgage holders should also consider whether they would be able to pay the higher instalments expected after expiry of the 3-year-period. Sándor Burány, socialist member of parliament suggested to the forex mortgage holders to use the mortgage calculator on the website of the State Audit Office of Hungary on a press conference on Sunday. The calculator is also accessible from the website of MSZP. Burány added that a primary factor in borrowers’ judgement should be what the Hungarian forint (HUF) is likely to fetch against the Swiss franc (CHF) in the next few years. If the Hungarian forint stays at its current rate against both the Swiss franc and the euro, repayment rates would rise significantly after the opportunity of the rate’s fixation around 180 forint expires, Burány added. In case of a ten-million forint mortgage taken up for twenty years the monthly repayment would be HUF 73,800 instead of the HUF 102,500 without the fixed exchange rates. After the expiry of the fixed repayment period, however, the complete instalment will reach about HUF 114,000 at an exchange rate of 250 according to the calculator of the State Audit Office. In case of a Swiss franc rate pegged to the euro at 270, the instalment will exceed HUF 125,000 according to the socialist lawmaker. To help troubled forex mortgage holders, Burány also added that MSZP was going to publish its proposed solutions in the coming days. He called upon the government again to return from holiday and to work towards maing sure that the state, the banks and foreign currency mortgage holders share the burdens. When a journalist asked what the former socialist government had done to avoid the foreign currency mortgage debts of families, he replied that Swiss franc credits had started to spread when the state-subsidized property credit system introduced by the first Orbán-government had become unsustainable. The state budget was unable to bear the pressure caused by property credits, and it would have increased the public debt enormously. Foreign currency credits also started to spread because the interest rate policy of the central bank increased interest rates for forint credits up to over 10 percent. The socialist politician also added that it could be no accident that most Fidesz politicians also have debts in foreign currency. They also thought themselves that it would be the best option.

Last Updated on Friday, 30 August 2013 09:11