Mortgage in Poland: How to Choose a Bank and the Best Terms?

Buying property in Poland is an important decision often tied to obtaining a mortgage. Selecting the right bank and the best financing terms requires thorough analysis, market knowledge, and proper preparation. In this article, we will cover the key aspects of this process to help you make an informed decision.

What is a mortgage?

A mortgage is a long-term financial obligation secured by property. The bank finances the purchase of an apartment, house, or other real estate, and the borrower repays the loan in regular installments.

Key elements of a mortgage:

Interest rate – consists of the bank’s margin and a reference index (e.g., WIBOR).
Loan term – usually up to 30 years, depending on the borrower’s age and bank conditions.
Down payment – typically, the minimum down payment is 20% of the property’s value, though some banks may lower it to 10%, and with support programs, it may be as low as 0%.

Stages of obtaining a mortgage

1. Creditworthiness assessment

A loan advisor will analyze your income, expenses, credit history, and current financial obligations based on the information and documents you provide. Prepare documents such as income certificates, tax returns (PIT), and employment contracts or other forms of employment.

For foreigners, proof of legal stay and permanent employment in Poland (e.g., residence card or visa) will also be required.

2. Choosing a property

Find a property that meets your needs and financial capabilities. Check its legal status and land register. At this stage, it’s worth engaging a real estate expert who can verify the legal status and facilitate the transaction.

In Poznań, rental apartments and property sales are highly popular, attracting both investors and those looking for a personal home.

3. Comparing bank offers

Examine the conditions offered by various banks. Key elements to compare include margins, commissions, additional costs (such as insurance), and the choice of fixed or variable interest rates.

4. Signing the loan agreement

After preparing all the necessary documents, submitting the loan application, and receiving approval from the bank, you sign the loan agreement. Ensure you fully understand all its terms before signing.

The property market in Poznań, particularly for home sales, is especially significant for families seeking more space and stability.

What to consider when choosing a bank?

1. Interest rate and margin

Choose banks with low margins and consider fixed interest rates to reduce the risk of increasing monthly payments.

2. Commissions and additional costs

Pay attention to commissions for granting the loan, fees for early repayment, and additional costs such as life or property insurance.

3. Additional services

Check if the bank offers flexible terms, such as loan holidays, changes to the repayment schedule, or the option to refinance the loan.

4. Bank reviews

Read customer reviews and bank rankings. Consulting an independent loan advisor can help objectively compare offers.

How to negotiate better mortgage terms?

Compare offers from multiple banks – having alternative offers increases your chances of negotiating better terms.
Increase your down payment – the higher the down payment, the better the terms you may receive.
Improve your credit history – pay off minor debts before applying for a loan to boost your credit score.
Consult a loan advisor – a professional advisor can help secure more favorable terms than you might achieve on your own.

Choosing the right bank and the best mortgage terms in Poland is a process that requires time, knowledge, and thorough analysis. Seeking assistance from loan advisors can significantly simplify this process and provide more favorable financial conditions.

If you’re planning to buy property in Poland, reach out to an expert who will guide you through the entire process from start to finish.