Do you want to have quick insight how mortgage loan market works in Poland? Don’t wanna spend tons of time by making research and reading articles? This post is for you. I listed below basic facts about the market. It will be good introduction to subject.

I’m keeping this post up to date!

1. Minimum deposit (down payment)

10%, 15% or 20% – vary between banks.

So if you are buying flat, for example in Wroclaw, for PLN 400k, you have to put down at least PLN 40k from your own savings. (in this post more about initial expenses when buing an apartment in Poland)

It means maximum LTV ratio (Loan-to-Value) is 80-90%. Bank estimate property value based on purchase price (unless bank’s valuation is lower).

You can also borrow additional amount for finishing / renovating your apartment / house – then bank will increase property valuation adequately.

2. Mortgage interest rates

Variable interest rate = WIBOR 3M (Warsaw Interbank Offer Rate) + constant bank’s margin

e.g. 1,70* + 2,05** = 3,75%

Bank will adjust interest rate in every three month period.

* WIBOR 3M (2018-04-26), **exemplary margin

On the chart below WIBOR 3M in 5 years period (source: bankier.pl). Click through the chart and check different periods.

For more check out: Mortgage interest rates in Poland – all you need to know

3. Estimated monthly repayment (for 20, 25, 30 years term)

On every 100k PLN, interest rate 3,3 – 4,7% (vary between banks):

20 years: 569 – 643 PLN / month
25 years: 489 – 567 PLN / month
30 years: 437 – 712 PLN / month

4. Additional mortgage costs (“Added to Loan”)

arrangement fee 0-3%

Instead of arrangement fee some banks require insurance with comparable initial premium payment.

life insurance

Some banks require life insurance with monthly premium payments which cover the debt in case of borrower death.

bridge insurance

Increased interest rate till mortgage is register in court

0,3 – 2,5% – vary between banks

Higher Lending Charge (low down-payment insurance)

Some lenders may charge you if LTV ratio exceed 80% by increase interest rate 0,2 – 0,6% until LTV drop under 80%.

valuation fee

100 – 800 PLN – vary between banks and also depend on property type.

More about initial mortgage costs in this post: Buying a flat on mortgage – let’s calculate initial expenses

5. Early Repayment Fee

The Act on Mortgage Loan and Supervision over Mortgage Brokers and Agents set limits for bank in charging borrowers :

max 3%
only in first three years of repayment

There are banks with early repayment fee lower than 3% or even with no charging borrower at all.

More about prepayment penalties in Polish banks here: Can I pay off my mortgage earlier? How it works in Polish banks

6. How long it takes to sign up a mortgage agreement

4 – 8 weeks (from submitting an application to signing a mortgage agreement) – vary dependent on how busy the bank is and the complexity of the deal. In some cases the whole process can take significant longer.

Detailed informations about application process you can get in banks or from a mortgage broker.

7. Maximum repayment period

30 or 35 years – residential purposes
20 years – home equity loans (any purposes)

In most banks borrower can’t exceed the age of 70 or 75 during repayment.

8. Is credit history necessary to get a mortgage?

No. You can get a mortgage in Poland with no credit history, however in some banks it might be an advantage if you have some.

9. Acceptable incomes:

employment contract (permanent / temporary)
civil law contracts
self-employment / sole trader
rental income
pensions
dividend income
agricultural activity income

10. Mortgage loan purposes

Residential

apartment and parking space purchase
house purchase
apartment / house renovation
new home construction
home under construction’ purchase and finishing construction
land purchase
refinance residential expenses (precede 12 – 24 month – vary on bank)
refinance mortgage loan (remortgage)

Non-residential

home equity loans (any purpose)
debt consolidation

Mixed

e.g. residential + debt consolidation + any purpose

I tried to point basic market facts here. If you think I should mention about any other issues – please leave the comment below or email me at kamil@polishmortgage.pl

If you want to lern more about polish mortgage market check out other articles, for example this ones: New flat from developer & mortgage loan – in 7 steps