Has signed three contracts for housing savings funds for 4 years. Then with the aim of turning the money out of which (plus another source) you will be able to buy your apartment for your child. Since the real estate market will be weighted by a new wave of price increases with the new 5% VAT increase from 2020, he wondered if he should go now and even cancel the housing savings! Calculate what is the solution in such a case!
Think about strategy!
Our basic situation is that Eszter has a sufficient amount of self-sufficiency (let’s say, for example, 20 million forints) and 3-year-old apartment buildings are running upstairs. These contracts were concluded free of charge for two years, but in case of early termination you have to pay the discount + do not receive state subsidies.
The legitimate question is, would Eszter be better off by keeping the house savings and crediting their value?
My first thought was that it was not worth losing the state support for housing savings halfway, while we could only get a relatively small and not necessarily necessary amount (do not forget that there are 20 million of own resources). We know that in two years we will be guaranteed SAQ 3.75 million. It would be worthwhile to raise $ 3.75 million in loans now, which will be repaid from home savings in two years’ time?
In the context of various banking actions, we are able to take out such a loan free of charge, as the valuation fee and the notary’s fee are fully refunded by several banks, with no disbursement commission. So now we don’t have to count.
For 20 years the 3,75 million SAQ home loan with a 3-year fixed interest period means a Monthly Repayment of SAQ 22,000 for a Qualified Consumer Loan. Here are three important circumstances to consider:
- The ASW rule will change from October 2018, and 25% of certified income can be spent on all repayments over a 3-year interest period (including the repayment of your existing loan)
- the 3-year interest period is justified because after 2 years we will be guaranteed to repay the loan from the house savings, so we will not pay the 10-year interest rate premium.
- we can redeem free of charge any home savings due to the MFB loan – but we have to find a bank where two years is the expiration date of the given discounts (so do not go back to paying off the discounts (valuation, notary) because we pay too soon
The credit numbers
We started with 3.75 million forints, but here we will have a small problem. That’s exactly what we expect from the housing savings, but in the next two years, our capital debt will decrease and the bank will be waiting for us at $ 3,482,000. In this case, the difference can either be spent on some other housing purpose (solar cell?) Or should we fund more loans from the base.
I expect you to spend nearly 300,000 forints remaining in your home savings. In the next two years, therefore, the interest paid on the loan, ie the actual cost of the loan, is SAQ 255,074
If we continue to pay the apartment savings, we will win
It is also the cost of the paid interest, because on the one hand we do not have to pay the 3 × 28 000 = 84 000 SAQ opening discount, and on the other hand we did not cancel the 3 x 72 000 (annual state subsidy) x 4 = 864 000 SAQ subsidy.
We pay SAQ 255 074 to get a guaranteed SAQ 864 000 + do not have to repay 84 000 forints = 692 926 forints not to give up the house savings, but to get a loan for two years instead.
What do we risk?
The problem is much more of a question: do we have enough coverage to pay this monthly loan of 22,000 SAQ + 3×20,150 forints of housing? Here is the question of what we do with the existing apartment? Sell or release? As the answer to sublease is the answer in this story, is the answer clearly “yes” as we would start with part of the incoming rent?
We’d be throwing it in the house. So why not leave existing contracts for extra state support compared to starting now from scratch?
In another variation, when the sale of an existing apartment would be our own power for the new apartment, the question is different. So far, we have paid 3 apartment savings, so the question is that we can also pay the 22,000 SAQ monthly repayment for two years? 24x 22,000 = $ 528,000 deposit?
Want to save or borrow money?
- I want to make a home savings
- I want to set aside a retirement goal
- I want to save my kids
- I want to add credit to an apartment
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