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Housing loans in 2023 – analysis. 2% secure loan Commented by Bartosz Turek

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Real action movies take place in banks today. They have finally been officially reached by the growing wave of people wanting a preferential loan in recent months. We won’t know the hard data until a month from now, but we can already see that the interest in the government’s credit subsidy program is huge, said Hreit Bartosz Turek, an expert in the analysis. – July this year will be the month of the greatest interest in housing loans – he added.

According to the analyst, the economic situation on the housing loan market has been improving for 10 months and currently oscillates around twice that recorded in August 2022. He noted, however, that “the real storm is just coming”, because a wave of people who were getting ready for a safe 2 percent loan started in July, and in addition, “soon they may also start interest rate cutswhich will facilitate access to “mortgages” for everyone, not just selected ones’.

Many Poles regained their creditworthiness

Turek believes that the reconstruction of the credit market is the result of the decision of the Polish Financial Supervision Authority, which allowed banks to approach creditworthiness tests more liberally, and the Monetary Policy Council stopped raising interest rates. “This has already caused many compatriots to regain their creditworthiness,” he wrote. He added that the situation is developing very dynamically. “A real action movie takes place today in banks. They have finally been officially reached by the growing wave of people wanting a preferential loan over the last few months. Hard data will be known only in a month’s time, but you can already see that the interest in the government loan subsidy program is huge” – he pointed out. The reason is a 3-4 times lower interest rate, and in addition, those applying for a subsidized loan need a much lower income than with ordinary debt. As a result – as he pointed out – there may be many more applicants than the government assumed. According to the expert, it is quite realistic to grant even 40-60 thousand preferential “mortgages”. “This gives full grounds to claim that July will be the month with the greatest interest in housing loans this year,” he wrote.

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Increased demand for standard loans

He also did not exclude the possibility of another wave of applicants at the end of the year. “If tens of thousands of preferential loans are granted by the end of 2023, the budget for 2024 may be exhausted or at least almost exhausted. If this happens, banks will be forced to stop accepting subsidized credit applications in 2024. In order to avoid this risk to avoid it, many people will probably want to submit an application this year” – explained Turek. According to the expert, an increase in demand for standard loans should also be taken into account, especially if interest rates start to decrease. Such expectations of the market are evidenced by quotations of interest rate forward contracts (FRA). “Their readings show (…) that in July and August interest rates will remain unchanged. In the longer term, the market is more optimistic. The October 3M WIBOR contract is valued at 6.44 percent. It is almost 0.5 percentage points lower than the current quotations of this indicator, which is important for borrowers.

Secured 2 percent loan – details

The Act on State Aid in Saving for Housing Purposes, which introduces i.a. “safe credit” with state subsidies to installments and a housing account with the possibility of obtaining a housing bonus from the state budget entered into force on 1 July this year. These products are offered by banks that have concluded an appropriate agreement with Bank Gospodarstwa Krajowego and introduced them to their offer. A loan with a periodically fixed interest rate can be taken by a person up to 45 years of age; if the loan is granted to both persons running the household, the age requirement must be met by at least one of them. The loan may be granted for the first apartment – the borrower’s household members must not have, on the date of granting the loan or in the past: an apartment, a house or a cooperative right to a flat or a 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 can be up to 200,000. zloty. In the absence of own contribution or incomplete contribution, you can use the guarantee of Bank Gospodarstwa Krajowego. The installments are subsidized for 10 years, and the loan is repaid in the form of fixed capital installments (decreasing capital and interest installments). During the period of application of subsidies, the loan interest rate, according to the explanations on the website of the Ministry of Development and Technology, will amount to 2 percent for the borrower. plus a margin, commission and other bank charges (if any).

Read also: A new government program could push house prices up

Main photo source: Shutterstock



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