Mortgage in 2020- what changes await us?

Will 2020 be stable for the housing loan market? What changes can future borrowers expect in the coming months? These questions are answered by a real estate credit specialist.

There is no doubt that given the quite complex political and economic situation in which Poland is currently located, it is difficult to make long-term forecasts regarding both the real estate market (especially the primary market) and the strongly related mortgage market.

Available data indicate that last year was one of the best


In the history of Polish housing, this is confirmed by the rest of the developers themselves. Many Poles, noticing a significant drop in the profitability of bank deposits, decided in 2020 to invest the accumulated capital in the purchase of a new apartment, mainly for rent. It is a natural and quite logical solution, considering that investment in real estate has been perceived as a safe solution for difficult and uncertain times for many years.

Poles have decided to mobilize quite a lot of their own savings for this purpose, hence the large change in the proportion of housing purchases for loans compared to cash purchases. Of course, it was an equally good time for the housing loan market, as the raw numbers say best – at the end of the third quarter of 2020, banks serviced nearly one million mortgage loans.

Will this year be equally successful for both markets – real estate and housing loans? Certainly, it will be difficult to get close to these record results, both in terms of the number of built and sold premises. First of all, the announcement of the introduction of a bank tax stands on the road, to which banks responded fairly quickly – several of them already at the end of last year raised the margin on mortgage loans, probably more will soon join them.

In addition, some banks adopted at the same time a higher level of living costs for people applying for a housing loan. In practice, these changes reduce the creditworthiness of many potential customers, thus reducing the credit and real estate market traffic.

We should also remember the changes

We should also remember the changes

Imposed by the Polish Financial Supervision Authority, which has been in operation since the beginning of this year and relates to the obligatory higher own contribution to the housing loan. This is a solution typical of many other countries – it allows you to secure the capital of the lender, but at the same time teaches the borrower greater responsibility for the financial liability.

Will the additional 5 percent of capital that should be brought into the loan out of pocket (plus the previous 10 percent) slow down the market? Not necessarily, because the reaction to the above changes is the possibility of additional insurance of the missing amount offered by several important banks on the market.

Thus, in their offer, the amount of own contribution remains unchanged at 10 percent. After all, it should be taken into account that in the coming month’s potential customers will be much more prudently making the decision to buy an apartment.

There is currently a large oversupply of vacant premises on the market

There is currently a large oversupply of vacant premises on the market

And soon there will be more, whose implementation began during the greatest prosperity, i.e. in the middle of last year. There is a chance, therefore, that the higher cost of a home loan will be offset by a reduction in housing prices, which some developers may choose to want to cash in their investments as soon as possible.

Finally, it is worth mentioning the variable indicators set quarterly for the Apartment for a Youth program. They also have a direct impact on market behavior. For example – the indicator for the city of Gdańsk in the current quarter has been reduced by nearly USD 200 compared to the fourth quarter of 2020.

Thus, an additional pool of flats falls under the MdM government program, which indirectly lowers their price, and thus – increases the attractiveness for the customer. Speaking of this, I want to draw attention to the numerous changes in local markets, because they ultimately shape the result nationwide.

Therefore, it is difficult to make a precise, unambiguous forecast regarding the behavior of both these complementary markets. It is certain, however, that the accelerated sale of apartments and loans in 2020 will not slow down too much, and the premises currently available on the market will certainly find their buyers.