Fidesz Proposes Locking Interest Rates on Retail Loans for 3 Years

Budapest, November 4 (MTI) – Lawmakers of the ruling Fidesz-KDNP alliance have proposed that banks should be allowed to change interest rates and interest rate margins in retail loan contracts only once every three years, parliamentary group leader Antal Rogan said today.

After a meeting of the parliamentary groups where a draft law on fair banking was discussed, Rogan said banks would have to announce any changes to contracts 90 days in advance. Banks would also have to provide an “objective index”, a formula which they used when changing the interest rate, and this would have to be approved by the central bank, he said. Other fees could only change at a rate not exceeding inflation, he added.

Interest for late payments would also be capped and borrowers would be allowed to cancel their loans, free of charge, every three years, Rogan said.

The new stricter rules would apply to all loan contracts by January 1, 2016 at the latest, he said.