On Monday, the Polish Financial Supervision Authority amended Recommendation S regarding good practices in the management of mortgage-secured credit exposures. The changes concern, among others, the inclusion of the government’s support program for housing loans. Thanks to the amendment, creditworthiness when taking out a loan from the Safe Credit 2% program. will be higher than in the case of a regular loan with a fixed interest rate and a fixed installment.
As reported by the KNF, the changes introduced concern the inclusion in Recommendation S of: guaranteed housing loan covered by the government program, housing loan covered by the government interest rate subsidy program; growth buffer interest ratestaken into account in the process of determining the customer’s creditworthiness; introduction of new expectations as to the inclusion of models estimating the risk of early loan repayments; introduction of new expectations regarding information on mortgage loan risks that should be provided to customers. The changes take into account the opinion of the Financial Stability Committee, noted the Polish Financial Supervision Authority (KNF).
The head of the Ministry of Development and Technology, Waldemar Buda, referring to the decision of the Polish Financial Supervision Authority, stressed that this is an exceptional situation and very good news for people who will want to take advantage of government support.
– In this way, we improve the creditworthiness of people applying for their first apartment or single-family house. The recommendation applies to all banks that will join the program. It primarily determines the method of calculating creditworthiness. To put it simply: from now on, more people have a chance for the first “M” – explained the minister.
Buda added that banks will assess people applying for a loan with a government subsidy more favorably. – The new recommendation will make such a loan even more accessible than a regular mortgage – he noted.
Own contribution and non-crediting of the full value of the property
In accordance with the published text of changes, with regard to loans granted – as part of the bank’s participation in the government program related to the offer by BGK of guarantees for mortgage loans without own contribution on the principles set out in the Act on family housing loans, the principle of recommending banks to demand own contribution and not to credit the full value of the property constituting the collateral is waived. In the changes, the KNF also provides the method of calculating the interest rate buffer, i.e. changes in the interest rate level taken into account when measuring and assessing the risk of mortgage-secured credit exposures bearing a variable or periodically fixed interest rate. In the case of a credit exposure related to real estate financing, subject to the cases where a guaranteed housing loan is granted by the bank, the bank should not credit the full value of the real estate constituting the collateral and should demand an own contribution from the borrower. The Polish Financial Supervision Authority expects banks and branches of credit institutions to adapt their activities to the changes in Recommendation S by July 1, 2024.
Safe credit 2 percent – rules
On July 1, the government’s Safe Credit 2% program comes into force. – a system of subsidies to the loan for the purchase of the first apartment or house. The amount of the “secure loan” cannot exceed 500,000. PLN, or – if the borrower runs a household together with his spouse or has at least one child – PLN 600,000. zloty. Own contribution cannot be higher than 200,000. zloty. In the absence of own contribution or incomplete contribution, it will be possible to use the guarantee of Bank Gospodarstwa Krajowego. The subsidy to the installments will be due for 10 years, and the loan will be repaid in the formula of fixed capital installments (decreasing capital and interest installments). During the period of application of subsidies, the interest rate on the loan, according to the explanations on the website of the Ministry of Development and Technology, will be 2 percent for the borrower. plus a margin, commission and other bank charges (if any). “Safe loans” will be granted by banks that will conclude an agreement with BGK in this regard.
The calculations of Jarosław Sadowski from Expander show that the available amount of Safe Loan 2 percent. will be about 31 percent. higher than for a regular loan with a fixed interest rate and a fixed installment. So if someone can currently get, for example, 300,000 PLN of an ordinary mortgage loan, the available loan amount with a subsidy will be approx. PLN 394,000. zloty. Now, if you can get 400,000. PLN, then as part of the Secure Credit 2 percent. will get about 526 thousand. zloty.
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