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Changes in mortgage loans. In 2017, it’s harder for your own M?

It has long been known that with the beginning of 2017, the limits on the minimum own contribution to housing loans will be raised again. Fortunately for borrowers, the GFIC is no longer planning further restrictions on the contribution.

Purchase of low contribution insurance


As part of the target solutions, the person buying the flat will have to provide at least a 20% contribution or accept the purchase of low contribution insurance if the saved savings are 10% – 20% of the apartment’s value. As at present, a contribution of less than 10% of the price of a house or flat will prevent its purchase with the help of a bank.

In relation to the current rules, from 1 January 2017, the contribution limit for loans without insurance will increase (from 15% to 20%). For people purchasing premises in large cities, an additional five percent of the price is quite a sum. Contrary to appearances, this is not the only change that will hinder buying a flat from 2017.

In this context, it is worth remembering the stricter rules for assessing creditworthiness and the diminishing importance of the GFI program.

At least 20,000 USD must be paid for an average place


The Central Statistical Office data suggests that the average premises bought in Poland cost about 4,200 USD / sq m. The area of ​​such a typical “M” oscillates around 50 sq m. – 55 sq m Therefore, it can be calculated that for statistical credit of the premises, a contribution of over USD 21,000 – USD 23,000 is needed.

From January 1, 2017, you will avoid purchasing insurance for a missing contribution (between 80% and 90% of the value of the apartment), you will have to collect twice capital. People who buy a house with the help of a bank, of course, must provide a higher contribution several times.

The average price of a Polish house is around 2500 USD – 3000 USD per square meter, but the meter of such a building significantly exceeds 100 sq m.

It is worth noting that the prices of premises in the largest national cities are usually much higher than the average calculated for the whole country. According to GFI data from the second quarter of 2016, the price leader is obviously Warsaw (see the table below). The minimum contribution (10%) for an average flat (50 sq m) in the capital is almost USD 37,000.

Avoiding low input insurance when purchasing a typical Warsaw premise will require as much as USD 74,000. For an approximate amount, you can finance 40% of a fifty-five-meter flat in Good Finance. In terms of the amount of input needed, Katowice and Kielce also stand out positively (see the table below).

Comparison of min. own contribution to buy an average flat, area 50 sq m in selected cities in 2016 and 2017

The GFI program only temporarily eases the GFI’s credit restrictions


Until now, restrictions related to the increasing contribution have been less severe thanks to the Flat for the Young program. This influence of GFI became particularly visible after the changes of September 2015, which significantly increased the popularity of the additional contribution.

However, you have to realize that the government program will no longer compensate so much for the restrictions introduced by the Good Finance Investment Corporation.

At present, you cannot use the exhausted subsidy pool for 2016. Half of the funds for the next year have already been spent, and after unblocking the second part (USD 373 million), there will be a real battle for subsidies. It can be expected that the entire pool for 2017 will end in the first quarter.

Approximately 90% of the funds planned for 2018 remain to be used, however, the total spending of this money will be difficult, since developers offer relatively few flats with a completion date of 2018. Buyers of ready premises will start using the last available pool only on January 1, 2018 (i.e. 9 months before the end of acceptance of the application for additional payment).

The purchase of a flat by less affluent people will also be more difficult due to restrictions on creditworthiness. Financial supervision has recently forced banks to implement more stringent customer income assessment rules.

Banks must also take into account a larger interest rate hike. The introduction of these changes has significantly reduced the amount that a typical Polish family can borrow from the bank.

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