The own contribution required is not always 20% of the loan amount

Good Finance, created by the Polish Financial Supervision Authority, imposes on banks and cooperative savings and credit unions in Poland the obligation to demand from clients who take out mortgages for the purchase of real estate 20 percent own contribution. However, only 10% really is mandatory. Why?

Banks grant mortgage loans to finance the purchase of a residential property or for the construction of a house with a 10% own contribution instead of 20%, but only with additional insurance, blocking of funds on a bank account or with the customer’s consent to increase the loan margin.

Currently, it is completely different

Currently, it is completely different

Before 2014, banks granted mortgage loans in Poland to finance the purchase of real estate without compulsory own contribution. Some of them even offered 110 or 120% loans to their clients. real estate values. So you could receive not only money to finance the act of purchasing an apartment or building a house, but also to have funds for finishing it, renovating or equipping it, as well as all fees related to with purchase.

Since 2014, the S Recommendation created by the Polish Financial Supervision Authority has been implemented. Pursuant to this recommendation, the requirement to have own contribution in the Polish financial sphere. With each subsequent year, the threshold for savings required for the mortgage loan is:

  • 5 percent in 2014,
  • 10 percent in 2015,
  • 15% in 2016,
  • 20 percent in 2017.

Therefore, when granting financing related to housing purposes, banks should now require 20%. own contribution from customers, which means that it is possible to grant a loan with LTV equal to 80%.

Departures from the rule


However, the banks found a gate from the PFSA’s recommendation. Replace, among others, 10 percentage points from the required 20% own contribution to insurance. Option to take out a loan with an LTV equal to 90% is possible, but the borrower must take into account the higher costs of the loan.

A loan with a 10% own contribution financing the purchase of a residential property will be granted, if the customer provides insurance for the missing contribution, he decides to block the funds deposited in a bank or agrees to increase the loan margin, directly affecting the monthly repaid capital and interest installments. All this is intended to compensate for the higher credit risk incurred by the bank

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