We are preparing for a significant increase in home loans!

On October 1, a new decree came into force, stating that, in addition to tightening the debt brake rules, borrowers are spending more, e.g. with the increase in the notary fee. The cost of 13 non-litigious notary proceedings is significantly higher.

Home loans may increase

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We have found that the average notarial fee for home loans may increase to several hundred thousand forints without the APR of the loan due to the multiplication of notary fees.

Banks sometimes take on some of the costs, but it can be said that borrowers are more likely to suffer.

Information from the Hungarian National Chamber of Notaries: October 1:

Information from the Hungarian National Chamber of Notaries: October 1:

  • “A 14/1991. (XI. 26.) IM replaces Decree 22/2018. (VIII. 23.) IM, which changes the notary fee.
  • Under the new Fees Regulation, out of the 23 existing notaries’ litigation procedures, 20 will change their fees and become more expensive.
  • The remaining three exceptions are the order for payment procedure, the European order for payment procedure and the enforcement procedure, which remain unchanged.
  • In 7 of the 20 notarial proceedings involved, there is a change in the fees, for example, there is no change in the fees for the credit registration proceedings. “

Notaries’ fees continue to consist of salaries and allowances.

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The reimbursement consists of a flat-rate sum and a flat-rate expenditure, the former generally amounting to 40% of the salary.

The salary is calculated based on the value of the item (eg loan amount) in a band definition or, in the absence thereof, on the time spent on the activity.

  • The bands used in the calculation of the salary show bands above HUF 200 million, HUF 500 million and HUF 500 million. The wage per band is made up of a fixed amount and a percentage of the transaction value above the lower limit of the band.
  • At the same time, the maximum value of the case value that can be taken into account in the calculation of the fee increases from HUF 200 million to HUF 1 billion.

It represents a 17% increase for unilateral statements.

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Another change is that

  • Fixed-line item fee items are also increasing, the rate of increase is HUF 2,250 per line value. The hourly wage for the activity has started to increase from HUF 1,500 to HUF 5,500 per hour.
  • Certified copies are pricier, from 300 forints to 750 forints.
  • There is also an increase in several fees, such as minutes for certification of minutes, preservation of documents, board meeting, board decision, competitive bidding, auctioning, grading and other legal facts. You also have to pay more for the estate.
  • The cost of incorporating an interest rate subsidized mortgage and mortgage contract into public deeds is not expensive.
  • In the case of a one-sided commitment on a $ 12 million home loan, we borrowed a 20-page notarial deed and 3 client copies (officially published) with the assistance of a notary at the branch. In our example, the total fee charged by a notary increased 3.5 times! Even with the administration of a notary’s office, the price is more than 2.5 times higher.
    This is because on the one hand bank branches, where in many cases the contract is signed in open or only closed by a glass wall, the client’s data management rights may be violated, and on the other hand the notary seems to be biased towards the bank.
  • If the bank asks for an electronic edition – this is the usual way – the notary fee will be even lower.

There is a great deal of competition among credit institutions in this area as well, and almost all banks now reimburse some or all of the start-up costs, including to a certain extent the notary fees.

In the case of early repayment, it is worth noting that if the loan is prepaid within the first 3-5 years, they may fail to repay.

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Taken together, the increase in notary fees will, in most cases (especially for larger loans), borrowers. This is also true for banks that do not apply any refund at all and for those who only reimburse their notaries for a fixed amount. The question is, to what extent does competition for borrowers encourage banks to offer even greater discounts?

If you are interested in finding out more about consumer-friendly credit, details about GFIC and taking out a home loan on favorable terms, contact our credit brokerage experts who will provide you with free professional loan information!

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