Interest margin on mortgage loans provided by commercial banks around the world has dropped alongside the falling interest rates in the last years. In some countries, such as Hungary, however, it remains stubbornly high to compensate for the political and economical problems and difficulty of households to service their debts. In 1Q2014, Hungarian banks charged twice as high margin on new mortgages than their peers in Poland, or Romania, for example.
Interestingly, the risk seems to be on the rise. Due partly to the on-going asset quality deterioration and the end of the intrerest rate reduction cycle, average interest margin on new mortgage loans have increased from 4.5% in 2011 to 5.5% in December 2013.
Helgi Library 
