A mortgage (hypoteka) is a loan secured by real estate, typically used to finance the purchase of a property. In Poland, mortgages are regulated by the Civil Code and specific banking laws. Recent changes in Polish law have introduced measures to protect borrowers, especially in times of economic uncertainty.

Key Legal Changes Affecting Individuals

Credit Holidays (Wakacje Kredytowe): Introduced in 2022, this law allows borrowers to suspend mortgage payments for up to 8 months over the life of the loan. This is particularly beneficial for those facing financial difficulties due to rising interest rates or inflation.

Usury Law (Anti-Predatory Lending): The Polish government has tightened regulations on interest rates and fees charged by lenders to prevent exploitative practices. The maximum allowable interest rate is now capped at four times the National Bank of Poland’s reference rate.

Foreign Currency Mortgages (FX Loans): Many Poles took out mortgages in Swiss francs (CHF) or euros (EUR) in the past. Recent court rulings have favored borrowers, allowing them to convert these loans into Polish złoty (PLN) at favorable rates or claim compensation for unfair terms.

Steps for Effective Mortgage Management

Budgeting: Assess your income and expenses to ensure you can comfortably afford monthly payments, even if interest rates rise.

Refinancing: Consider refinancing your mortgage to take advantage of lower interest rates or better terms. Polish banks now offer more flexible refinancing options.

Credit Holidays: If you’re struggling financially, apply for credit holidays to temporarily suspend payments.

Insurance: Protect yourself with mortgage insurance, which covers payments in case of job loss, illness, or death.

Tax Benefits

Polish law allows individuals to deduct mortgage interest from their taxable income, up to a certain limit. This can significantly reduce your tax burden, making homeownership more affordable.

Recent Legal Developments in Poland

1. Consumer Protection Laws
The Polish Financial Supervision Authority (KNF) has introduced stricter regulations to protect borrowers, including:

• Mandatory affordability checks before granting a mortgage.
• Clear disclosure of all fees and interest rates.
• Limits on variable interest rate adjustments.

2. Green Mortgages
Poland is promoting sustainable housing through “green mortgages,” which offer lower interest rates for energy-efficient properties. This aligns with the European Union’s climate goals and encourages both individuals and companies to invest in eco-friendly buildings.

3. Digitalization of Mortgage Processes
Recent laws have streamlined the mortgage application process by allowing digital signatures and online submissions. This reduces paperwork and speeds up approvals, benefiting both individuals and companies.