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Secure Credit 2 percent. Money will run out faster than willing people – analysis by HRE Investments

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The First Apartment program is waiting for proceedings in the Sejm. One of its elements is Secure Credit 2 percent. The money will run out faster than the willing ones – assessed Bartosz Turek, the main analyst at HRE Investments. The government estimates that by the end of 2027, 150-200,000 cheap loans will be granted to people buying their first apartment. According to Turk, “these figures may be underestimated.”

The government last week approved a draft law on the program First Apartment. Now the proposed solutions will be submitted to the Sejm for work. One of the elements of the program is Secure Credit 2 percent, which will be addressed to people up to 45 years of age. The solution provides for subsidies to the loan for 10 years, so that the interest rate on the liability is 2% throughout this period. plus the bank’s margin. As announced, the program is to start on July 1, 2023.

Secure Loan 2 percent – what interest?

Bartosz Turek, chief analyst at HRE Investments, pointed out that the interest rate on loans granted under the new program is to be about 3-4 times lower than the standard market offer. “Purchase with the help of Secure Loan 2 percent is also to turn out to be much cheaper than renting. This means that the group of potential beneficiaries should be very numerous” – he noted.

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Meanwhile, government estimates show that in 2023, 10,000 loans will be granted under the Secure Credit 2%, and 40,000 in 2024. “For comparison, in 2021, when housing loans had an interest rate of around 2-3 percent, Poles received an average of over 20,000 loans per month. Of course, only some part (estimated to be about a third) of mortgages supported people buying their first apartment in life” – pointed out Turek.

In his opinion, “even these data suggest that much more preferential loans may be granted this year than the government estimates”.

How much cheaper?

HRE Investments has prepared a comparison – based on NBP data on housing prices, assuming a loan for 25 years and contributing 10 percent. own contribution – regarding the potential amount of the first installment for a 50-square-metre apartment, under the standard loan and commitment under the new program.

HRE Investments

Secure Credit 2 percent – how many credits will be granted?

The value of financing granted under the Safe Credit 2% was estimated at PLN 3.2 billion in 2023 and PLN 13.2 billion in 2024, respectively. According to the draft, the source of financing of subsidies to installments will be the Government Housing Fund already existing in Bank Gospodarstwa Krajowego (BGK).

For now, it is not known which banks will take part in the Safe Credit 2 percent. The Ministry of Development and Technology indicated that those financial institutions that will sign an appropriate agreement with Bank Gospodarstwa Krajowego and introduce instruments to their product offer will participate in the program.

Development Minister Waldemar Buda announced last week that the government does not envisage a limit in 2023. Turek noted that this would mean that by the end of 2023, BGK would not be able to stop accepting applications for cheap loans. According to Turek, this means that the number of beneficiaries of Secure Loan 2%, estimated by the Ministry of Development, should ultimately turn out to be much higher.

“If, as promised, the first preferential loans will be granted in July, then by the end of the year this gives as many as 6 months of the government program. It can be estimated that by the end of 2023, preferential loans will be granted even over 40,000.

At the same time, he pointed out that there is a risk that the launch of the housing program will take longer due to the creation of new procedures. “On the other hand, there are already information that developers and brokers are preparing to launch a cheap loan program. It will probably be similar with banks. So it is almost certain that on the day when it will be possible to apply for a preferential loan, many people will be fully prepared for this – with a set of completed forms, necessary certificates, statements and a real estate purchase agreement waiting to be implemented” – he added.

Read also: There is a reaction to government announcements. “Big interest”

According to Turk “so it would not be a surprise if instead of 10,000 preferential loans, which the government expects to grant in 2023, the final result turned out to be several times higher”. Therefore, according to the analyst, if the government program comes into force in the formula that is being processed today, the data on how many such preferential loans will be granted in total may also be underestimated.

“In the impact assessment of the regulations attached to the bill, there is a number of 155,000 – this is the number of cheap loans to be granted by the end of 2027. In the statements of the head of the ministry responsible for this bill (Waldemar Buda), there is a suggestion that the total of preferential loans may be around 200,000,” he said.

What conditions?

According to Bartosz Turk, the potential of the program is much greater, because the conditions entitling to take advantage of Safe Credit 2 percent “are not excessively high”.

As announced, they will be able to apply for a preferential loan people under 45 who do not have or have not had their own “M” before. “In order to receive a preferential loan, you also need to have the so-called creditworthiness, i.e. we must be able to pay the installments. The Safe Credit 2 percent mechanism, however, is designed so that in the eyes of the bank we can afford a larger loan” – explained the analyst .

“After all, for the first 10 years of debt repayment, we will receive government subsidies. During this time, we will also give back a large part of the loan (e.g. one-third or half). so the creditworthiness of potential beneficiaries of the program should be at least several dozen percent higher than when taking out a loan without additional payment” – added the representative of HRE Investments.

The maximum loan amount that one person is to be able to obtain under the Secure Loan 2% is PLN 500,000. zloty. In the case of a married couple or parents with a child, it will be PLN 600,000. zloty. In turn, the borrower’s own contribution may amount to a maximum of PLN 200,000. zloty. You will be able to get a loan for apartments both with primary marketas well as secondary.

Loans under the Safe Credit 2 percent are to be granted until 2027.

Main photo source: Shutterstock

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