Otthon Start Program – 3% Home Loan for Young People: Making the First Home More Affordable

Housing prices in Hungary have risen dramatically in recent years, especially in major cities. Increasingly, young adults are facing the reality that buying a home with their own savings is almost impossible—even for a first property. The government’s new measure, the Otthon Start subsidized home loan program, specifically targets this problem. Its goal is to provide first-time homebuyers with access to a favorable loan at a fixed 3% interest rate, up to 50 million HUF. For many, this new scheme opens the door to owning their own home.

What is the Otthon Start Program?

The Otthon Start program is a government-backed home loan available to individuals purchasing their first home. The program’s main attraction is the fixed 3% interest rate, which remains unchanged for the entire loan term—up to 25 years. This is a significant advantage compared to current market loans, where interest rates can hover around 6–7%.

Main Parameters of the Program:

• Fixed 3% interest for the full loan term
• Maximum loan amount: 50 million HUF
• Maximum loan term: 25 years
• Minimum down payment: 10%
• Property price limits: up to 100 million HUF, with a maximum of 1.5 million HUF/m²

Who is Eligible?

The loan is available exclusively to individuals who are buying their first home, meaning they currently do not own at least 50% of any residential property. Marriage or having children is not required to apply, making the program accessible to single applicants or couples alike. However, a minimum of two years of continuous social security (TB) contributions is required.

The program has no age restriction, so while it primarily targets young adults, eligibility is not limited by age.

What Types of Properties Are Covered?

The subsidized loan can be used to purchase new or used apartments as well as houses. The property price must not exceed 100 million HUF, with a maximum price of 1.5 million HUF per square meter. This criterion may limit options in Budapest and other major cities, whereas in rural areas, far more properties meet the criteria.

Potential Savings

For a 50 million HUF loan, with market interest rates of 6–6.5%, the monthly repayment could reach 330,000–380,000 HUF. With the fixed 3% rate, however, the monthly payment would be around 237,000 HUF—almost 100,000 HUF less per month, adding up to more than 1 million HUF saved annually.

This not only benefits the monthly budget but also significantly reduces the total amount repayable over the loan term.

Expected Impact on the Real Estate Market

Experts suggest the program may stimulate first-time homebuying, particularly among young adults in their 20s and 30s. Demand is likely to rise for smaller, more affordable apartments—such as studios and flats—especially in major cities. In rural areas, where property prices are lower, interest may be even higher.

At the same time, increased demand could push prices up. This is particularly noticeable in the market for smaller apartments, as supply may not grow proportionally. This could exacerbate affordability challenges for those who are not eligible for the program.

Government Costs and Sustainability

The 3% interest rate is subsidized by the government, meaning the difference is covered by the state budget. Annually, this could cost between 50–150 billion HUF. Similar to the Széchenyi Card program, the state guarantees favorable terms in exchange for stable, predictable repayments for citizens.

Who Benefits Most?

Young people with a stable job and verifiable income, but who cannot otherwise afford a home on their own, are likely to gain the most from this program. For them, the subsidy is not just a financial benefit, but also a long-term opportunity to build a future.

Young families in rural areas may benefit especially, as significantly more properties fall within the program limits than in Budapest or around Lake Balaton.

Summary

The Otthon Start program is an ambitious and well-targeted housing support initiative, offering real opportunities for first-time homebuyers. The fixed 3% interest rate provides stability and predictability, significantly lowering monthly repayments compared to current market loans. While the long-term effects—such as pressure on property prices—are not yet fully visible, the program is undoubtedly a step toward helping younger generations gain access to homeownership. The Kenway team is ready to assist, providing guidance and expertise to help you secure your first home.