Today, we are facing a diverse range of home loans, whether we want to take out bank or home savings cash. The choice is difficult as every credit institution offers favorable constructions.
One of the most important decisions in life is taking out a home loan, it is very important to be able to make a clear, forward-looking decision, and our individual life situation is also a major factor in this matter.
Let’s examine which is the most favorable, LTP or bank home loan offer. The most popular credit institution offering LTP is Good Finance.
Let’s just see the results!
Banks’ mortgage interest rates have been better so far, but Good Finance has improved its offer with changes at the end of 2017. The interest rate on a home savings loan can be reduced to 3.5%!
We know that Home Savings Interest is fixed to the end of the term, so you can see the amount of interest payable until the end of the loan term. With the advent of consumer-friendly home loans, banks have been offering more and more fixed mortgage schemes over the past year as they provide fixed rate protection against interest rate risk.
Home savings funds give you a chance to get a loan at maturity when you sign the contract. This loan is equal to the amount determined by the home savings for the facility.
There is also a special option provided by LTP, called the BRIDGE loan.
This is a help for those who have an obligation to pay on the property sooner, because in this case they can pre-pay the full amount of the contract before the end of the savings, even at the time of conclusion of the contract.
Here the maturity consists of two parts:
- From the bridging loan section (includes interest on the savings and loan amount, the debt is not reduced under this option, but can be paid off with the 30% grant at maturity of the LTP) The interest on this facility is 5.9%.
- And from the home loan phase, which is judged to be a new loan and the capital and interest are paid off. This part has an interest rate of 3.5%.
The amount of credit that can be taken depends on the LTP. Increasing the number of contracts with our family members can increase the amount of the contract and loan. The maturity is also regulated by the LTP mode.
For comparison, we examined a 10 million forints 10-year home loan based on the two options (LTP and Bank loan).
Home Savings Fund: We have to contract 3 of them for 60.000 HUF.
In the case of a bank home loan, it is very clear, since the principal debt decreases all the time, and the repayment installment is the same, HUF 96.6 thousand.
For the bridge loan
We will pay the home savings and interest of the 10 million loan amount, which is HUF 100,000 / month for 64 months. This decreases first when the LTP is repaid (4 million), and after the remaining 6 million HUF the repayment will be 105 thousand HUF / month.
Overall, the APR on the bridging loan comes to 5.43%, which is less favorable than the APR for the most favorable 10-year home loan.
So the bank home loans overall, in terms of repayment, beat the LTP bridging loan combination!