Next month, an increased salary will already be paid to those working for the minimum wage and the guaranteed minimum wage: after a 9 percent increase in the minimum wage, the mandatory minimum wage has risen to HUF 290,800 gross (net: HUF 193,400), while the minimum wage for skilled workers has increased by 7 percent to HUF 348,800 gross brought an increase of (net: HUF 232 thousand) From January 2025. Although the wage increase can hardly be said to be generous – because the increase was only HUF 16 and 15.2 thousand, this also allows residential customers to pay somewhat higher repayments when taking out a loan.
When taking out a loan, the assessment decision is greatly influenced by the amount of net income, it may depend on whether someone gets a loan at all, and if so, how much they can expect. At the outset, it is important to mention the ratio of income to repayments (JTM), which states the following:
- Debtors with a net monthly income of over HUF 500,000 are generally allowed by the banks to be 60 percent indebted,
- those who do not earn that much can borrow up to 50 percent of their income.
50 percent is still very high, since who can afford to transfer half of their salary to the bank every month? This is not even an option for the minimum wage, since regular payment is the most important factor when assessing bank credit.
We have calculated how much credit we can take based on the currently valid rules.
If someone works for the minimum wage and wants to take out a loan without a co-debtor, even in 2025, he cannot undertake monthly repayments of HUF 100,000, those earning a guaranteed minimum wage can undertake monthly repayments of slightly more than HUF 100,000.
Minimum wage earners can take out a maximum of HUF 12-13 million housing loan for a 20-year term, the repayment of which remains below the JTM limit. All this, let’s face it, is not even enough to buy apartments in the countryside, let alone a property in Budapest.
The median net income of HUF 359,100 means that half of Hungarians bring home more than this, and half less, to the family coffers. Those who earn this much can sign up for almost 180,000 HUF installments, and for the average salary, you can also take on HUF 208,000, and the amount you can borrow increases proportionally with the increase in the salary.
Especially above HUF 600,000 net monthly income, because then we can sign up for a repayment of HUF 360,000, and for a net monthly salary of HUF 1 million, even a HUF 600,000. It is important not only to follow the rules, but also to think carefully before taking out a loan, what kind of expenses, possibly other debts, loans we have outside of the scheme we want to take out.
What is the minimum wage enough for?
There are not only central income minimums, banks always determine a minimum income level below which they will not lend. This is usually HUF 150,000 for a single debtor, while a total monthly net income of HUF 200-220,000 is expected for joint debtors. It is important that this minimum is not determined centrally, so you may come across different offers at different credit institutions.
Banks usually set the minimum net income required for lending below the minimum wage, thus providing them with the opportunity to borrow. However, it is a question of how much repayment he can accept from his net monthly salary of less than HUF 200,000.
Unfortunately, the issue currently affects many people in Hungary, as 214,000 receive the minimum wage, 325,000 the guaranteed minimum wage, while there are almost 200,000 between the two lowest wages – so in total, nearly 740,000 workers earn no more than HUF 232,000.
Personal loans vs. home loans
Out of HUF 193,400 net income, HUF 96,700 can be the highest repayment. Now, for the sake of safety, let’s calculate with 40 percent instead of 50 percent, in which case the amount will be reduced to HUF 77,000 per month. In the case of personal loans, it is also worth paying special attention to the interest rates, as they can be very high, among the currently available plans there are also those where you have to pay back almost twice as much, we wrote about this in detail here.
When taking out an unsecured personal loan, the minimum wage can be sufficient for a loan of up to HUF 4 million, but only if the term is 72 months. For the majority of offers, the loan amount increases proportionally with the term.
What if someone wants to buy real estate and earn minimum wage? With a 20-year term, the maximum is HUF 12-13 million, while with a 30-year term, we cannot borrow more than HUF 14-15 million. It is also true for this type of loan that the loan amount can be increased by extending the term. However, it is important to note that extending the term also increases the total amount to be repaid, as we have to pay more interest for using the money.
The babysitting and family home creation discount (csoc) loans provide more favorable conditions, and it is possible to borrow amounts over HUF 10 million from the subsidized schemes, even with a minimum wage.
Own apartment remains a dream
The housing market has had a strong start to the year, according to Ingatlan.com’s January analysis. In the last days of 2024 and the first days of this year, the number of inquiries for residential properties for sale increased by 8 percent year-on-year, which is 28 percent higher than two years ago.
From the demand that develops in the first few weeks, it is possible to estimate with relative accuracy what kind of period is ahead of us on the housing market. Now it can be concluded that those looking for residential real estate are those who would buy for their own purposes.
Source: www.economx.hu
