I would take a fixed rate loan for 3 years, and after 3 years, I would like to change the interest rate fixation to 5 years. Can I do?
The expert gave the following answer.
If you look at the example, a home loan has a fixed interest rate for 3 years, if the fixation period is over, you can change the period, but there is something to consider, the central bank’s interest rate change indicator.
In the case of commonly used loan packages, the practice was that if we fixed the home loan at 3 years, we had to keep it until the end of the term.
There was no way to change
Today there is only 1 bank in Hungary where the interest period can be changed before maturity in the case of a market loan. If the example expires in 3 years, we can change the period with a free contract modification, with specified initial terms.
In the case of new consumer loans received, the interest period for each loan can be changed.
The rating can be changed for 3, 5, 10 years or for a fixed term for a full term.
There is one hurdle, however, because not all banks have several types of consumer-friendly loans. It is worth choosing where a bank offers at least two types of interest rates. Because if there is not just one period, then we have to get through it.
Let’s quote the expert
- “Outside of the savings cooperatives, 3 of the 9 big banks can only choose from one type of consumer-friendly loan, meaning we have no way to go through interest rates”
Changes to the Free Interest Period must be requested in writing 30 days prior to the previous maturity date. It is predicted that interest rates will rise in 3 to 5 years, so we can start the next period with higher interest rates.
- The longer the interest period, the higher the interest rate. This is because the banks are taking risks.
In summary, it is not common to switch between interest periods!
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