The Hungarian government will seek to put a cap on the interest rates banks will be allowed to charge their customers whose foreign currency mortgage loans are to be turned into forint based loans. The Wall Street Journal reports that the law states it will “eliminate the foreign-exchange risk crippling borrowers unilaterally, while also supporting the country’s financial stability.” The interest rates on mortgage loans are not to exceed 5.5%, while home equity loans must be limited to 7%, writes the WSJ.
With a majority in parliament, the ruling Fidesz party is making good on its promise to lighten the debt load of its voters, at the expense of the banks. But it also appears to acting on prime minister Viktor Orban’s commitment to bringing more of the country’s financial institutions under Hungarian control. GE Money Bank is the most recent foreign investor to announce it will be pulling out of the country, despite making a profit in 2013.
