Information about renting to buy

Information about renting to buy

Renting to buy is not a common form of buying a property in Hungary. However, it is possible of course. There are a couple of important things you need to understand before you buy a house like this via “My Hungarian House”.

• The seller will ask for proof that you have a stable income
• In total you might pay more than paying upfront since the value of future money is lower than the value of present money. How this is calculated will depends on the duration of payments and what you can agree on with the seller.
• If you see a house on our website for sale for 35 000 euros you should expect that you may pay about 41600 euros for it over 5 years if deposit is 5000 euros. This is calculated using the annual percentage rate, which is between 9% and 10% in Hungary at the moment (2023, May)
• In some cases, sellers will say that paying in instalments is only possible if you can pay the full purchase price within 1-3 years or if you are able to pay 50% upfront. Please always ask about the details about the particular property you are interested in.
• The deposit is expected to be between 10% and 20%.

Renting to buy a property also means that you will need to sign two contracts:

1, A precontract written by a lawyer. When you sign it, you will pay the deposit.

2, A contact of sale, not earlier than 6 months before you pay the last instalment of the purchase price.

The reason why you need to pay two contacts with the sellers is that the land registry in Hungary can open a case only for 6 months. Therefore, the lawyer can only register you the earliest 6 months before you pay the last instalment for the property.

As there are two contracts, it increases the lawyers fee by roughly 300 euros, which is to be covered by the buyer.