Hello all, I am in the process of purchasing a property in Budapest which is due for completion during March 2007 and so am investigating my mortgage options. Has anybody taken out a mortgage for a Hungarian property before and, if so, where did you source the mortgage from? I am considering using a company called Fidentia - has anybody used them before and what is the verdict on them? They can source mortgages in euros or swiss francs. The euro rate is 6.99 and the CHF rate is 5.99. Has anybody got any advice as to why it is more sensible to take out a euro mortgage as opposed to a CHF mortgage? Hungary does not plan to join the euro zone until 2010 I think so rental will presumably be paid in HUF. Any advice is welcome. Thanks, Pete

Hi Pete Out of interest, what sort of capital gain and/or yield returns are u expecting to get from ur off-plan investment in Budspest? C.

Hi Claude, I am expecting an average capital gain of approx 15% over the long term, 10+ years with a yield of about 5%. Budapest is definitely a long term play, especially with the downgrading of the economic forecast over the past few months. Pete

Hi Pete, Off-plans in Budapest do not exactly come at a bargain, and u'd be lucky to get a LTV mortgage of more than 70%. Off-plans sell at about the same prices as in Riga or Warsaw. Now, taking into account the fact the Hunagrian Economy might be in for a long time to get itself into shape, why dont u simply invest in Poland, for instance? Also, have you considered buying period property? The reason am asking is because I have bought, and got out of, an off-plan in Budapest. when you look around, you'd find out that pretty much every other country in EE is and will be doing much better than Hungary. C.

Pete, I am also buying off-plan in Budapest and considering using Fidentia but the build is at an earlier stage than yours. The UK agent says Fidentia have been used successfully for many purchases in Budapest but that is of course not an independant view. I have to say I am grappling with the same question about euro v CHF. Fidentia want me to submit my application now even though completion is not until the second half of next year. Presumably this is just to secure the fee because I cannot see ann advantage to me. Any thoughts? Regards, Mark

Hi Claude, I suspect you are right about potential returns in Hungary in the short term - although if they can get the economy sorted out then I imagine the appreciation could be good. I am still buying anyway because I really like Budapest and I want a holiday home there. I may also try out short term holiday lets to cover the modest mortgage. However, another factor is that property seems very cheap in Budapest when compared to Warsaw for example, and therefore my funds are going a lot further particularly in terms of location. How did you find the relative prices when you were researching it? Regards, Mark

Hi Mark, Off plans in Budapest are not exactly "very" cheap compared to Warsaw. You still have to fork out about €120k for a 2bed with an underground parking in a central location. About a year or two ago, off-plan prices in Budapest were even higher than Warsaw. The key here is that Warsaw has been witnessing growth since then whereas prices in Budapest have been standing still or even going down. Granted, period properties are cheap but then the market is awash with them and u'd have to spend quite a lot rfurbishing them. In my opinion, it only makes sense to buy in Budapest if u r planning to use the flat personally, permanently or on regular time intervals. C.

Hi Claude, Budapest was my first venture into EE and I saw it as a fairly safe option at the time. Unfortunately, that was before the downturn in the economic forecast. However, long term I still think that it should be a good investment. Regards, Pete

Hi Mark, I first contacted Fidentia about 6 months ago just to test the water. I told them that I would be in touch later and they agreed to freeze the fee that they are charging me - they have recently increased their fees. My apartment is due for completion in about 4 months, although I am having trouble confirming that it is still on course for then due to un-responsive Hungarians :-) Fidentia told me that 3 months would be enough time to arrange the mortgage so I should still have at least a month to play with. Regards, Pete

Pete, I don't know whether there is a way on this site, but would you be interested in exchanging e-mail addresses? It could be very useful to compare notes; I assume yours is not a PS deal so I don't see why it would be an issue. I have just learnt today that my completion date could be as early as March (or as late as July) contrary to what I had believed previously, so we are on very similar timescales. Cheers.