An Alternative for Future Lending: Income-Linked Repayments

Incze, Zsombor (2025) An Alternative for Future Lending: Income-Linked Repayments. FINANCIAL AND ECONOMIC REVIEW, 24 (3). pp. 95-122. ISSN 2415-9271

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Abstract

The study presents the most typical domestic and international trends in mortgage lending models and product development through a literature review of their historical evolution. It concludes that innovations concerning the basic structure of mortgage loan products have not spread in the Hungarian market, although recent academic literature has proposed such developments. Building on one of these academic innovations, a mortgage product based on income variation over the career cycle is developed. This product is examined through the Hungarian medical wage scale and the Magyar Nemzeti Bank’s housing affordability methodology. The findings suggest that, with timely and forward-looking financial planning, a household consisting of early-career physicians could potentially afford to purchase a home, suitable for raising children, as their first property.

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