Interest rate freeze extended

The extension will save borrowers an additional 20 billion forints. However, the measure means additional costs for banks and it is unclear whether some of this loss will not be passed on to customers. The banking association had already harshly criticised the measure last week. In addition, the interest rate environment has fallen sharply over the last year and a half, so there is also a debate as to whether it is still necessary to artificially freeze interest rates.

André Palóc, spokesman for the Ministry of Economy, recalled that by introducing the interest rate freeze in January 2022, the government had relieved families of interest burdens totalling 300 billion forints to date. He also pointed out that one of the most important pillars of the government’s 21-measure action plan for a new economic policy is the provision of affordable housing. As part of this plan, new elements will be added to the range of measures to support families, including the possibility of using savings from voluntary pension funds for housing projects in addition to the freezing of interest rates.