The Polish Financial Supervision Authority (KNF) prohibits banks from granting mortgage loans for 100% of the property value, i.e. without own contribution. Therefore, any potential borrower interested in such a loan must have a specific amount of money – what?
People interested in buying a property or building it on credit must take into account the obligation to have their own contribution. This is a requirement of the Polish Financial Supervision Authority, which supervises all banking institutions in Poland – for the benefit of consumers and, apparently, the banks themselves.
And so, since 2014, anyone interested in a real estate loan must have savings, from which they will finance their own contribution, or will have to get it in a different way.
In order to apply for a mortgage (housing)
You had to have at least 5% of your own contribution. In 2015, the limit was raised to 10%, in 2016 it is as much as 15%, while from 2017 the contribution must be at the minimum level of 20%. However, banks are able to bypass this 20% own contribution by insuring low own contribution.
Therefore, at present 10% is enough and the rest, i.e. another 10%, is insured and does not have to be paid in cash. Young people will probably have the hardest time getting the required amount of money, all the more so because before they can take out a loan for the property they have to live somewhere – renting the flat is much harder to accumulate savings.
So why is the Polish Financial Supervision Authority so obstructing the path to your own apartment, which the vast majority must buy with a loan? The KNF went to war, as it were, with banks applying too lenient money lending policies.
It also prohibits banks from granting cash loans
So that the client would spend it on the missing own contribution. And although the PFSA clearly forbade such practices, anyone can go for a loan to a different bank than the one in which they apply for a mortgage.
Not so long ago, banks were willing to grant us a mortgage for over 100% of the price of the property, so as if with a negative own contribution.
At that time, no one was surprised by the payment of long-term loans of 110% or even 130% of the collateral value. It seems, however, that these times are irrevocably gone, and all those who intend to apply for a mortgage in the future, remains to start saving as soon as possible.