CSOK Plusz is a very favorable subsidized loan for housing purposes, which is connected to countless discounts and advantages, which are a huge help for families planning to buy a home. In addition to describing these benefits, Bankmonitor’s article also highlights the financial implications of not having the promised children – they can even be ordered to pay back several HUF 10 million as punishment. Let’s look at their examples.

## A childless couple has a child

Let’s say the couple takes out a HUF 15 million CSOK+ loan, the interest rate is fixed at 3%, and the term is 20 years. 4 years are available to fulfill the agreed child. Let’s examine two options.

- The baby is born at the end of the second year of the term. The couple does not enforce the moratorium that can be used at that time.

At that time, the initial installment is HUF 37,500. The installment is so favorable because the loan starts with a grace period of one year, during which only interest must be paid on the loan. From the second year, the installment will increase to HUF 86,391. This must be paid until the end of the 20th year. The total repayment of the subsidized loan is HUF 20,147,186.

- The couple does not have a baby, which is why they have to pay a lump sum penalty at the beginning of the 5th year.

The situation is exactly the same until the end of the fourth year. At that time, the deadline for having a child expires and the interest subsidy must be settled in a lump sum plus penalty interest. This means a total payment obligation of HUF 4,243,192. In addition, the monthly repayment will also increase, as the loan must continue to be paid at a normal interest rate, the current rate of which is 8.61%. Thus, from the 5th year, the monthly installment would increase to HUF 126,497. And the total repayment would rise to HUF 32,090,794.

The family could currently apply for a normal market loan at an interest rate of 6.5 percent. At such an interest rate, the monthly installments of the HUF 15 million, 20-year loan would be HUF 111,836, and the total amount to be repaid would be HUF 26,840,633.

## A childless couple has two children

In order to achieve their housing goal, they would require a CSOK+ loan of, say, HUF 30 million, with an interest rate of 3 percent and a term of 20 years. There are 8 years available for the children to fulfill their commitments. Let’s examine two cases here.

- Both babies are born – the first at the end of the second year and the next one at the end of the fourth year. The couple does not enforce the moratorium, but at the end of the 4th year, HUF 10 million of the outstanding debt will be waived.

In the first year, the repayment installment would be HUF 75,000, at which point only interest must be paid on the loan. The capital payment also starts from the second year, which is why the installment increases to HUF 172,782. This is what the couple has to pay until the end of the 4th year.

When the second baby is born, HUF 10 million of the outstanding debt will be waived. For this reason, the monthly installment will be reduced to HUF 107,139 and will remain the same until the end of the loan. The total amount to be repaid for the HUF 30 million loan would thus be HUF 27,690,848.

- The couple does not have a baby, which is why they have to pay a lump sum penalty at the beginning of the 9th year.

In this case, the HUF 172,782 installment would have to be paid until the end of the 8th year. That’s when the black soup comes – since the couple did not have a child, they have to settle the interest subsidy received up to that point with penalty interest, which would mean a payment obligation of HUF 19,527,796. In addition, the monthly installment will also increase from the 97th month to HUF 232,978, which the family should pay until maturity. In this case, the total repayment would increase to HUF 68,490,311.

If the couple were to choose a home loan with a market interest rate, they could apply for it at a current interest rate of 6.5 percent. With such an interest rate, the monthly installments of the HUF 30 million, 20-year loan would be HUF 223,672, and the total amount to be repaid would be HUF 53,681,266.

## A childless couple has three babies

In this extreme case, a childless couple would have three babies. To achieve their housing goal, they would request a HUF 50 million CSOK Plus with a 3 percent interest rate and a 20-year term. There are 10 years available for the fulfillment of the agreed children. Let’s examine two options here as well.

- In the first case, all three babies are born – the babies are born at the end of the 2nd, 4th and 6th years in a row. The couple will not enforce the moratorium, but at the same time they will release HUF 10 million of the debt at the end of the 4th and 6th year.

The initial installment would be HUF 125,000, at which point only interest must be paid on the loan. The capital payment also starts from the second year, which is why the installment increases to HUF 287,971. This is what the couple has to pay until the end of the 4th year, when the second baby is born and HUF 10 million of the outstanding debt is forgiven. For this reason, the monthly installment is reduced to HUF 222,327, and at the end of the 6th year (third child), HUF 10 million is released again. Then the monthly installment will decrease again, and the family will only have to pay HUF 149,358 per month for the remaining time. The total amount to be repaid for HUF 50 million would be HUF 42,294,880.

- The couple does not have a baby, so they have to pay a penalty at the beginning of the 11th year.

In that case, the HUF 287,971 installment would have to be paid until the end of the 10th year. If no baby has been born so far, the entire interest subsidy must be settled in one sum plus penalty interest, which would mean a payment obligation of HUF 42,862,291. In addition, the monthly installment will also increase from the 121st month to HUF 371,516, which the family should pay until maturity. In this case, the total repayment would increase to HUF 120,045,038.

By choosing a market interest rate, you could apply for a home loan at an even 6.5 percent interest rate. At such an interest rate, the monthly installments of the HUF 50 million, 20-year loan would be HUF 372,786. The total amount to be repaid would be HUF 89,468,776.

## There are still question marks

Based on the examples, it is clear that the advantage of the CSOK Plusz scheme is huge compared to a market loan, but all this is true until the children are born. Otherwise, the size of the penalty can significantly increase the amount to be repaid on the subsidized loan.

However, many details are still unclear. For example, it is not known when the penalty should be calculated using the central bank base rate, so Bankmonitor’s experts used the currently valid 10 percent as a starting point. What can be clearly read from the legislation is that the penalty interest must be calculated from the application until the end of the childbearing deadline, which was determined by the experts with a serious simplification (the interest subsidy valid for the given month was increased by a self-determined penalty interest for the remaining period until the childbearing deadline). Using a different calculation method would result in a different result. It is certain that you should only have a child responsibly, because the penalty associated with the support can result in a huge one-time burden.