The new rules introduced with Act LXXVIII of 2014 on the amendment of Act CLXII of 2009 and certain related acts in relation to the terms and conditions of consumer loan agreements, generally known as the “Fair Banking Act”, must be applied from 1 February 2015.
The “Fair Banking Act” makes the terms and conditions of consumer loan agreements transparent and able to be followed to consumers as well, and fundamentally changes the pricing methods of loans designed for natural persons.
Pursuant to the Act, loans are available with several interest rates, which may vary by product type. The following summary illustrates the main characteristics of the various interest rates:
1. For loans tied to a reference rate, the period (term) of the reference rate is included in the announcement on the contracted product and the contract concluded with the client. For mortgage loans, our Bank uses -12-month BUBOR (Budapest Interbank Offered Rate) as the reference rate. The reference rate used for loans secured by private deposits or by securities is 1-month BUBOR/1-month EURIBOR (Euro Interbank Offered Rate). In this case, the interest payable by the client is always the currently effective reference rate, plus the interest margin. UniCredit Bank has fixed the interest margin for its retail loans tied to a reference rate for the entire term.
Loan interest = reference rate (12-month BUBOR/1-month BUBOR/1-month EURIBOR) + fixed premium
For loans offered with a reference rate, the standard interest rate varies with the same period (term) as the reference rate and follows the fluctuation of the selected reference rate.
2. With regard to variable interest rates, which are fixed in interest periods, the Bank may modify the interest rate according to the interest margin alteration index specified in its Retail Business Regulations and in the contract concluded with the client.
If the interest rate is fixed for interest periods of at least a 3-years then the interest rate may vary according to the specific indicator at the end of each period.
Interest margin alteration index used by our bank: H1K
Further details in Hungarian about the indicator are included in the Retail Business Regulations and on the fair banking sub-page of the NBH website.
According to the new rules, the standard interest rate may be modified by no more than the fluctuation of the indicators approved by the NBH and clients must be able to check it with the help of the timelines, published on the NBH website.
3. Certain loans are also available at a fixed interest rate. The interest rate on personal loans is fixed for the entire term, and the same type of interest is also available for mortgage loans. It means that the interest will not change during the term, irrespective of the changes occurring in the money and foreign currency markets during that period.
4. With regard to overdraft facilities and credit cards, our Bank is entitled to amend the standard interest rate specified in the agreements twice a year, on January 1 and July 1 each year in compliance with the provisions of the Retail Business Regulations. It means that a modification may be made if the costs of funding, i.e., the monthly average of officially quoted 6 monthly BUBOR reference interest rate calculated in the second calendar month preceding the last month of the given half-year – in October and April, respectively – indicates a change compared to the value of the previous half-year. You can read more about the interest rate changes in our Retail Business Regulations.
If you wish to have more detailed information, please visit the Fair Banking page in Hungarian on the NBH website, where you will find detailed information on fair banking.