Viktor Orban has won a third term as prime minister after a strong poll showing by his party, although the far-right Jobbik party also increased its share of the vote.
An official projection gave Orban's Fidesz party 133 of the 199 seats in parliament after 96 percent of the ballots were counted from Sunday's election, guaranteeing that it will form the next government.
That tally also gave Orban's party the necessary two-thirds majority to change the constitution.
"We can say with absolute certainty that we won," Orban told cheering supporters in the capital, Budapest. "These elections were free. Organised in a free country."
The same projection also gave the Socialist-led leftist alliance 38 seats and the anti-Roma and anti-Semitic far-right Jobbik party, 23 seats.
Gordon Bajnai, one of the leaders of the opposition alliance, called the result a "crushing defeat".
"This is a great disappointment to those who wanted a change in government," he said.
Orban has repeatedly clashed with European and foreign investors.
In the past four years, his policies have included a nationalisation of private pension funds, "crisis taxes" on big business and a relief scheme for mortgage holders for which the banks, mostly foreign-owned, had to pay.
The Jobbik party won 20.7 percent of the national vote, up from 15.86 percent four years ago, achieving the strongest showing by any far-right party in the EU in the past few years, according to Cas Mudde, an assistant professor at the School for Public and International Affairs at the University of Georgia.
"There is no doubt that Jobbik will be among the strongest far-right parties in Europe, which is particularly striking because it is also one of the most extreme of Europe's far-right parties," Mudde told the Reuters news agency.
The Jobbik party has pledged to create jobs, be tough on crime, renegotiate state debt and hold a referendum on EU membership.
It denies being racist, but Hungarians have questioned its attitudes towards Jews and the Roma, especially after a senior party figure proposed drawing up lists of Jews in parliament in 2012.