The THM (the Hungarian APR), or total credit cost indicator, is a percentage figure that shows the total annual cost of taking out a given loan — and it is not the same as the interest rate. The interest rate is only one component of the THM; if you look only at the interest rate, you can easily pay several hundred thousand forints unnecessarily, because the fees on top of the interest can add several percentage points to the real cost.
What does THM mean, and what is it made of?
The THM condenses all loan costs into a single, comparable number. A lender is required to state it on every offer — this does not depend on the bank's goodwill but is mandatory for every Hungarian lender by regulation.
The THM usually includes:
- the interest (or, depending on the interest period, the variable rates),
- the disbursement and administration fee,
- the valuation fee (for mortgages, and a site inspection for construction),
- the cost of the mandatory account keeping,
- the land registry fee for registering the mortgage,
- the property insurance fee built into the THM calculation.
What the THM does not include: the default interest, the fees for changing the term, the early repayment fee, the notary costs, and — most importantly — it does not reflect the risk of a variable rate. So the THM is not everything either: a "free" loan can still be expensive if the rate goes up.
THM calculation: how it works in practice
The THM calculation assumes that you do not repay early before the end of the term, do not fall into arrears, and that every condition stays unchanged. It expresses this assumed term and these costs as an annualised percentage. Under the regulation, the THM may be at most the central bank base rate + 39 percentage points — so it has a cap, which may be adjusted to the base rate every six months.
Example calculation
For information only, simplified: you borrow HUF 10 million for 10 years. Two offers, with the same interest rate:
| Bank A (hypothetical) | Bank B (hypothetical) | |
|---|---|---|
| Loan interest | 7% | 7% |
| Disbursement + administration fee | 1.5% | 0.5% |
| Mandatory add-ons (valuation, account, etc.) | yes | no |
| THM | ~9.5% | ~7.8% |
The same advertised interest rate — a different real cost. A THM of ~9.5% on a HUF 10 million, 10-year loan can mean roughly HUF 1.5–2 million more to repay over the term than a 7.8% offer. I will not give an exact figure per bank — every bank must state its current THM in its offer, and these can be checked.
The difference between THM and interest rate: what to watch for?
According to an MNB (Hungarian National Bank) survey, most respondents could not say whether a loan's THM or its interest rate was the higher. Yet the gap between the interest rate and the THM is made up precisely of the fees beyond the interest. Two rules:
- To compare loans, always use the THM, not the interest rate.
- Compare offers on similar parameters: the same amount, term and interest period. With different interest periods (e.g. 3 vs. 10 years) the THMs become incomparable.
What is the THM now, and what is the THM cap?
As a reference: based on an earlier survey, the average THM for home-purpose loans was around 6.1%, for unsecured mortgage loans around 10.90%, and for personal loans around 14.66% (for HUF 8 million, 7 years, with a net income of HUF 450,000). What is it today? I cannot say per bank — the cap adjusts to the base rate every six months, so the current values have to be checked at the MNB and in the banks' announcements.
0% THM — a free loan?
A 0% THM means that during the assumed term both the interest and the costs beyond interest are HUF 0. It is rare, and applies only to the items counted in the THM: if you fall into arrears or repay early, the fees not counted in the THM are still there.
When do you need help deciding?
For a simple personal loan the THMs can be read off an online calculator — you do not even need to come to us as a partner for that. Where we can genuinely add value is in complex cases — several banks, Széchenyi vs. market loans, foreign income, corporate structure, HUF 100–200 million financing. There the terms behind the THMs (interest period, mandatory insurances, products pushed because of the branch quota) are what decide, not the number itself. As for exactly what THM a given bank is lending at today, even from a broker's side the fresh announcement is authoritative — I do not make that up, I check it in the specific case.
Frequently asked questions
What is the THM, simply?
The total annual cost of the loan, expressed as a percentage: the interest plus the fees beyond the interest, in a comparable form.
Can the interest rate be higher than the THM?
Practically no: the THM includes the interest, so it is typically higher. If you see otherwise on an offer, ask about it — it may be an erroneous or atypical disclosure.
What is not part of the THM?
Default interest, the early repayment fee, the fee for changing the term, the notary cost, and the risk of a rate change.
Is there a THM calculator?
There are several free online calculators that rank offers by THM. For complex cases (foreign income, a company) a calculator is not enough — there you need an individual calculation.
Why does the THM change?
For a variable-rate loan it is moved by the interest environment; and the cap may change every six months in line with the base rate.
Sources
- Bankmonitor: What you need to know about the total credit cost indicator, the THM? — https://bankmonitor.hu/mediatar/cikk/mit-kell-tudni-a-teljes-hiteldij-mutatorol-a-thm-rol/
- Bankmonitor: What does the THM (total credit cost indicator) show? — https://bankmonitor.hu/mikor-valtozhat-a-torleszto/mit-mutat-meg-a-thm-teljes-hiteldij-mutato/
- Bankmonitor: The THM cap rises significantly from January — https://bankmonitor.hu/mediatar/cikk/jelentosen-emelkedik-januartol-a-thm-plafon-mi-lesz-a-hitelkamatokkal/
- Bankmonitor: Interest rate or THM? — https://bankmonitor.hu/mediatar/cikk/kamat-vagy-thm-percek-alatt-kiderul-melyik-a-fontosabb/
- Money.hu: The concept of the THM (total credit cost indicator) — https://tudastar.money.hu/fogalom/thm/
- MNB (Hungarian National Bank) — https://www.mnb.hu/
- MNB Decree 32/2014. (IX. 10.) — https://njt.hu/
- How to choose a loan in 2026? — https://erkoz.hu/blog/hitelvalasztas-2026/
- 5 common mistakes that get your loan application rejected — https://erkoz.hu/blog/5-gyakori-hiba-hitelkerelmes-elutasitas/
