It combines the features of personal loans and mortgages
a Free use mortgages They are not associated with any use the bank controls disbursing, they are similar to personal loans. That is, the range of possibilities is infinite, so there is no need to spend the amount raised on an apartment, car, or a particular durable FMCG. It can work out an unexpected emergency, or even cover the first wings of a startup that hasn’t yet received a loan from anywhere else.
Of course, this is also true for personal loans, but there is a fundamental difference. This is because free-to-use mortgage loans can be obtained at much lower interest rates, and this is due to predictability. This type of loan is also similar to a home loan in that it requires collateral, and the mortgage must be recorded on our existing property. The evaluation required for this, of course, takes longer, and in the event that the loan is not paid, the bank may form a right to the property under the mortgage.
There is a situation in which you do not have a competitor
So it’s definitely worth considering borrowing, but the benefits are also worth considering. The purpose of using free use loans is arbitrary in all cases, making the loan type the only option for larger loan amounts, for example over 10 million HUF. Their interest rate is always better than the rate of personal loans due to the guarantee.
This is how much the free mortgage costs
For example, if we need 5 million HUF, we can start borrowing on favorable terms for a period of 5 years. Based onIf we send our income to the chosen bank. CIB is already offering a free-to-use fixed rate mortgage with a monthly installment of HUF 94,167 and an annual rate of only 5.09%. Thus the total amount to be paid is only 5,656,620 HUF. The loan installment offered by Erste Bank is also only HUF 95,829 per month, while Raiffeisen offers a free-to-use mortgage loan at a monthly cost of HUF 96,873. The annual percentage rate in the latter two cases is 6 and 6.26 percent, respectively.
Thus, the annual interest rate for free-of-use mortgages is slightly higher than fixed-term home loans, but still much lower than personal loans. 360 Bank Personal loan calculator It does not show a personal loan of less than 7.82% APR of € 5 million, as the costs for all three offers shown above are lower. We save this interest cost by reassuring the bank that we are a reliable debtor by presenting our property as collateral.
Last year, it also replaced the personal loan
The diverse use of free-of-charge mortgages is evidenced by the fact that some personal loans have been lost in the last year They were replaced by loans secured by real estate collateral. That is, as the annual interest rate cap made it more difficult to borrow personal loans due to the tightening of credit ratings, borrowers began to look more for free-use mortgage loans. No wonder, because a higher commitment, as we’ve already explained, means lower interest rates for the type of loan.
