Mortgages are offered by several universal banks and several specialized mortgage banks. Usually, such liabilities are incurred for several or several dozen years, and the loan amount is calculated in hundreds of thousands of zlotys. A specific feature of mortgages is the collateral required from the borrower – a mortgage entered in the land and mortgage register of a financed real estate or other apartment or house.
A mortgage gives the bank priority to be satisfied when selling a property, regardless of who will own it at the time. Such an entry in the land and mortgage register does not limit the rights of the owner of a house or apartment. We can freely dispose of our assets.
Own contribution in the mortgage
Buying a property with a mortgage have to be willing to contribute their own. Since 2015, an absolute requirement for borrowers to have at least 10% has been introduced. the price of real estate bought on credit. In subsequent years, the “standard” threshold was gradually increased – to 20 percent, while maintaining the possibility of additional security for the missing 10 percent. In practice, this means that today you can not take out a mortgage without having funds for at least 10 percent. investment value.
The higher the borrower’s own contribution, the lower the risk the bank-lender bears. This may or may not mean that the bank will offer better price terms to a customer who is financially involved in the transaction.
The cost of the mortgage
The cost of the mortgage consists of several elements. The first is interest paid on borrowed capital. Banks mainly offer loans with a variable interest rate. They are determined as the sum of a selected indicator from the interbank market and a fixed credit margin throughout the repayment period.
The amount of the margin usually depends on several factors – the amount of the loan, the amount of own contribution, the borrower’s risk (including his credit history) and the features of the property. Customers who decide to purchase additional bank products, e.g. setting up a personal account or buying insurance, can count on lowering the credit margin. This practice is called cross-selling or cross-selling.
Several banks in Poland also offer fixed rate mortgages. The fixed rate applies, however, only for the first few years of repayment. After this period, we can opt for fixed interest rates again or switch to variable interest rates. This type of loan guarantees that the installments will not change, but it means, at least initially, a higher repayment burden.
In addition to interest, the total cost of the mortgage is affected by:
commission, usually paid at the beginning of the loan.
real estate appraisal fees.
bridging insurance, paid for the first few months, until the mortgage for the bank is entered in the land and mortgage register.
life insurance, unemployment insurance etc. which may be required by the bank.
Additionally, if we make an own contribution lower than 20%. of the investment value, the bank may apply a higher interest rate or charge a low own contribution insurance premium for the first several installments. A summary of the mortgage costs will be presented to us in the information form, when we turn to the bank or loan broker and ask for simulation.
Choosing the best loans available on the market requires thorough checking of the offers of many institutions. Every month, Bankero publishes mortgage loan rankings prepared for various assumptions. Thanks to them we can check which banks currently offer the best conditions.
We can also carry out an initial mortgage simulation without leaving your home. In the credit comparator, we provide some basic parameters and receive information about the offers of several institutions.