Credit experts describe Vienna as the world’s liveliest city for years. A lot of Hungarians work in our western neighborhood. Real estate prices are higher, but they get much higher wages and offer attractive home loans that are accessible to everyone. If we compare, in Vienna, the APR and the start-up of long-term loans are half the size of home loans offered by domestic banks.
With less stringent regulations, applicants for home loans can get safer, cheaper loans.
The main reason why many people are able to commute and travel more and occasionally live outside is a livelier life, better prosperity, and a more secure future. What’s more, taking out a home loan is much easier, safer, and easier than at home, because incomes are higher.
In Austria, the average salary in 2016 was 2,030 euros, while in Hungary it was 570 euros. The difference is 480,000 forints, which in itself is significant, but in addition the Austrians get a 14.5 month salary for 12 months because they also pay 13th and 14th month wages!
According to the average value, the price per square meter of flats is between 2,000 and 3,500 euros, which means fluctuation between 600,000 and 1,1 million HUF. According to the comparison, one square meter is available for newly built people between 1.1 and 1.4 million forints (3,000-4,500 euros). Outstanding values are in priority areas, but that is clearly not the average price category.
Due to EU membership, Austria also complies with the general rules. Banking practices for home loans are basically the same as in Hungary, but we should not forget that the approx. they only pay twice as much for real estate as their quadruple income.
In our case, lending is severely constrained, and the turmoil of foreign currency loans has necessitated repayment installments and specific loans relative to the value of the home. But there are also mandatory rules in Hungary. Such is the maximum 80% of the real estate occupancy rate and the income occupancy rate, according to which the monthly repayment installment of eligible home loans can be up to 50-60% of the monthly net income. In Austria, there are no numerical limits, each of which was individually developed by each bank in its loan package.
There is also an emphasis on the borrower’s income situation in Austria, but because of the higher average income, households are more likely to pay for more expensive real estate and its repayments. Outside the property, they charge up to 70% of their value, but they rarely allow loans of up to 0 on their own. Banks are quoting a mortgage 30% higher than a loan, even at home, but in this case the target real estate collateral will probably not be sufficient, meaning additional cover will be required.
There is no minimum wage in Austria, but banks expect the borrower to pay about twice the lowest wage in the country. According to more permissive regulations, this income according to banking practice is between EUR 1,000 and 1,100. Those who are unable to borrow due to their low income may choose to save on housing, but subletting is less onerous for a household there than for a family with an average income.
In borrowing, credit is the largest item and is what determines our income. In Austria, we find cheap and transparent loans, so we are in a comfortable position. According to the Austrian central bank, the change is 1.8% within one year, and 2.2% if interest rates are fixed for 10 years and over.
In our case, this is 3.4 and 5.4 per cent of new home loans. With a lower loan interest rate, the repayment installment may be 25% lower. It is also a unique opportunity to fix the interest rate of our loan up to 10-20 years in advance.