New customer friendly changes on the Hungarian housing market

The Hungarian housing market has recently undergone a change that aims to make it more customer friendly. The impact of the changes will significantly influence the housing sector on both an individual and governmental level. In its search for increased efficiency, Hungary plans to redefine what it means to be a customer-friendly market. The following are some of the most important and beneficial changes to the Hungarian housing market:

1. To lower consumer prices, the APR cap will be applied universally to property insurance rates.

This measure is a drastic cut from the previous formula. Despite the fact that this was already a well-known and widely accepted concept, it has been implemented in Hungary for the first time. Previously, the maximum capitalization ratio (MAC) had only been applied in certain regions. The new measure will apply to all properties nationwide.

2. A new renewal option will be added to the contract anniversary cancellation option. March will offer a free cancellation period. Customers will have a “free” switching option.

This measure will allow the consumer to make changes to their housing contract almost every year. Previously, this option was only available once every two years. This is being done in order to provide additional flexibility to the consumer. The housing market will be able to provide a wide variety of options to customers, making the housing sector more customer friendly.

3. The insurance intermediary’s remuneration cannot exceed 20% of the property insurance premium.

The margin of insurance brokers will be reduced. This measure aims to decrease the number of brokers willing to sell their services to customers. If the vast majority of brokers will charge excessive fees, people may choose to purchase their home insurance and mortgage insurance through another intermediary. This will only serve to decrease the profitability of insurers’ businesses and make them even more customer-unfriendly.

4. The MNB’s Qualified Consumer-Friendly Home Insurance (Minősített Fogyasztóbarát Otthonbiztosítás, MFO) calculator will help consumers choose the best insurance offer while giving customized mortgage loan information

The MFO will help customers choose the best insurance offer while giving them mortgage loan information. The MFO shows which of the customer’s needs are being met efficiently. Moreover, it will also provide information on where and how much the costs could increase. It is intended for use by anyone seeking mortgage loan information. Because of the wide variety of benefits that it provides, the calculator has become extremely popular among home owners.