Hungary has rolled out its most ambitious homeownership programme since the transition to democracy, with the government pledging to make property purchases more affordable for first-time buyers while giving a powerful boost to the construction industry, pro-government media outlets wrote on September 1, after the kick-off of the Home Start loan scheme offering 3% fixed rates. 

Under the scheme, buyers could borrow up to HUF50mn (€130,000) for a maximum of 25 years with 10% down payment, reduced from 20%, at rates half of the prevailing rates.

Government officials claim the scheme, which is backed by long-term state interest subsidies, could support hundreds of thousands of young people and families in stepping onto the property ladder.

"This is the strongest first-home programme in Europe," said Miklos Panyi, state secretary and deputy minister in charge of the scheme, adding that it makes housing more accessible, reins in runaway prices, and stimulates the construction of tens of thousands of new homes."

The launch of the new credit scheme, with less than seven months until the election, the measure is widely seen as an attempt to bolster support for the ruling Fidesz party among middle-class urban voters and those under 35.

It is part of a series of other populist initiatives timed ahead of the election, such as doubling tax allowances for families with at least two children and the gradual introduction of a lifetime PIT exemption for mothers with at least two children.

The government has not addressed the direct fiscal impact of the measure. Analysts note that the scheme generates immediate fiscal gains through higher transaction taxes and multiplier effects. However, its medium-term costs could outweigh these benefits, as state subsidies might reach tens of billions of forints, placing additional strain on Hungary’s already stretched budget. Some economists have even questioned the long-term sustainability of the program.

Initially, the preferential loan programme was designed to help first time homebuyers, but the eligibility criteria were later broadened to include applicants who had held up to a 50% ownership stake in a residential property within the past ten years, as long as the value of their share did not exceed HUF15mn. 

For households or married couples, it is sufficient for only one member to meet the eligibility requirements. Furthermore, it will not be required to live in the property, nor to rent it out, opening the door for would-be investors.

For these reasons, many analysts argued that Home Start disproportionately benefits affluent buyers and warned that pent-up demand, as already seen in the surge in new inquiries, could risk further inflationary prices, from an already high level. Home prices in Hungary have surged at one of the quickest rates in the EU over the past decade, with prices tripling across most regions. In some regions, prices have doubled since the pandemic.

On the launch of the programme, banks have rolled out their fees, with some going below the 3% threshold to gain a larger market share.

MBH Bank, the country’s second-largest commercial lender, is offering HUF100,000 worth of MOL fuel vouchers to borrowers. CIB Bank has launched a 2.95% promotional rate for the first five years, along with rebates and waived fees. Granit Bank is going further, advertising 2.85% rates and one-off HUF200,000 rebates.

Financial website Portfolio.hu has estimated that monthly new home loan outlays could rise from HUF140-150bn to HUF170–240bn, driven by the subsidised scheme, pushing home lending to record highs in 2025 and 2026.

Listings site ingatlan.com reported that 71% of prospective home buyers now plan to take out credit, up from 51% in March, while nearly 60% expect to finalise a purchase within six months.

Demand is already spilling into the market as property search activity jumped to a four-year high in August, while developers have announced over 10,000 projects in Budapest for the autumn, many targeting Home Start buyers. Eligible properties under the programme are capped at HUF100mn for flats and HUF150mn for houses, and the maximum per sqm price is set at HUF1.5mn.

Duna House, one of Hungary’s biggest brokers, forecast that new home construction projects could nearly double by 2026, reaching 20,000–25,000 annually, with a larger increase in completions expected by 2027–2028.

Construction association EVOSZ predicted orders for 10,000 additional new homes in 2025, rising to 35,000 by 2027, which is the level seen as necessary to renew Hungary’s ageing housing stock.

The National Bank on September 1 announced that while own equity requirements will be reduced to 10% for borrowers over 40, stricter debt-to-income limits will apply: for households earning less than HUF800,000 per month, no more than 50% of their income can go toward repayments.

Economists expect the scheme to lift not only lending volumes but also construction-sector output, with potential HUF800bn in new orders.