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Government extends loan rate caps

October 28th, 2022

A left-wing commentator questions the government’ decision to impose interest rate caps on business loans.

On Saturday, the government announced that it will place a ceiling on loan interest rates for small and medium=size companies until 30 June 2023. According to the Hungarian Banking Association, lower interest rates will cost commercial banks 80 billion Forints.

In Népszava, Miklós Bonta acknowledges that the government’s loan interest rate caps are beneficial for Hungarian families as well as entrepreneurs. The left wing columnist nonetheless finds the measures controversial as they cost commercial banks billions of Forints. Bonta adds that the government is sending a bad message by helping out debtors who have not changed their loan contracts to fixed rate loans as suggested by banks and the government. As a result of the government’s intervention, irresponsible debtors will be better off after the interest rate caps than those who switched their mortgages to fixed-rate loans, Bonta explains.

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