Otthon Start 3% Home Loan for Young People – Making the First Home More Affordable with a Subsidized Loan

For many young people, buying their first home is both a dream and a challenge. Rising property prices, high interest rates, and the need to gather a down payment often make the first home feel out of reach. The Otthon Start 3% home loan, introduced by the government, aims to change this. Available from September 1, 2025, it offers long-term fixed and predictable repayments. This program allows young people not only to dream about owning a home but to actually gain access to one. Thanks to the fixed interest rate and favorable conditions, financial planning becomes much more manageable, giving borrowers confidence that their monthly payments will remain stable throughout the loan term.

New Rules and Conditions – What Has Changed?

The biggest advantage of the Otthon Start program is that the loan comes with a 3% fixed interest rate for the entire term. This means borrowers don’t have to worry about market interest rate fluctuations: the monthly payment remains the same for up to 25 years.

The key new conditions include:

• Maximum loan amount: 50 million HUF
• Loan term: up to 25 years
• Minimum down payment: at least 10%
• Property price limits: maximum 100 million HUF for apartments, 150 million HUF for houses/farms
• Price per square meter cap: up to 1.5 million HUF/m²
• Eligibility: applicants must not have owned more than 50% of a residential property in the last 10 years, except if the property’s value was below 15 million HUF
• Social security (TB) requirement: at least 2 years of continuous contributions
• Other conditions: clean criminal record, no outstanding debts, and a government-imposed transfer restriction for the first 5 years

Positive Feedback

The program has been welcomed by many young people and experts because:

• Repayments are predictable, with no interest rate increases
• No marriage or childbearing requirements, making it accessible to a wider audience
• Available nationwide, not limited to specific regions
• Can be combined with other subsidies (e.g., CSOK Plus), allowing multiple benefits to be stacked

Criticisms and Concerns

Despite the positive feedback, some concerns have been raised:

• Even a 10% down payment can be difficult to save, especially in larger cities
• The price-per-square-meter cap is often too low in central Budapest and other large cities, excluding many desired properties
• Banks’ individual credit assessments can be stricter than official rules, meaning not all eligible applicants are automatically approved
• The government-imposed transfer restriction means the property cannot be freely sold in the first five years, which some consider limiting

How Does This Affect the Real Estate Market?

The new scheme can boost demand, particularly among those under 30 who were previously hesitant due to high interest rates. This may give a significant push in smaller towns and rural cities where property prices are more likely to fall within the program’s limits.

In Budapest, however, there are concerns that the limited supply may drive prices even higher. Demand may rise while prices continue to climb, especially in the 80–100 million HUF range.

And the Rental Market?

The program also has implications for the rental market.

• Positive impact: if more young people buy homes, long-term demand for rentals could decrease, potentially stabilizing or even lowering rents in certain areas.
• Challenging aspect: due to the price caps, many properties in Budapest are not eligible for the subsidy, so many will still need to rent, keeping rents high, particularly in central districts.

Who Is This Suitable For?

Ideal candidates:

• Young people with a stable income
• Those able to provide a down payment
• Those looking in areas where property prices fit within the program’s limits

Less ideal candidates:

• Those seeking to buy in premium areas of Budapest or other major cities
• Those without sufficient savings for the down payment
• Those unsure about how long they want to stay in the property, since early sale is restricted

Summary

The Otthon Start 3% home loan represents a real opportunity for the younger generation, offering a predictable, long-term financing solution. At the same time, its impact on the market is mixed: while it makes first-time homeownership more achievable in smaller towns, it could increase demand and property prices in Budapest. The rental market may shift over the coming years, but significant rent reductions in Budapest are unlikely. The Kenway team is ready to help navigate this changing market, offering personalized advice and expertise to support first-time homebuyers in finding the best solution.