Applying for a mortgage to purchase property in Poland is a minefield. There are just so many variables such as where you currently live and work, the currency in which you are being paid in and the currency in which you want to borrow in.
All this used to add up to a complete headache but luckily we’ve put this guide together to make it super easy!
There are a couple of ‘rules’ you need to know before we continue:
#1. 99.9% of the time you won’t be able to get a mortgage in Poland if you are self employed in the U.K. You will require a contract and need to have proof of that contract.
#2. Act on Mortgage Loan and Supervision over Mortgage Brokers and Agents
Sounds more serious than it actually is, it’s nothing to worry about but it is important. This ‘act’ simply means that the mortgage loan has to be in your income currency.
So let’s say you live in the UK and your earnings are therefore in pounds [GBP] you can only apply for a mortgage loan in GBP. Or for instance if you live and work in Germany and so your earnings are in Euros [EUR], the same rules apply, you can only apply for a loan indexed in Euros.
This is true regardless of your citizenship aswell, so you could be Polish but living and earning in the U.S, you would still apply for a mortgage loan with a Polish bank but the mortgage would be in dollars [USD].
Why is this a rule?
Simply to stop any exchange rates risks for the ‘lendee’ [you!]. As otherwise if you borrowed in another currency, different to the currency you are earning in and then that currency rose dramatically [which used to happen alot] suddenly your mortgage payments are now much more expensive. So they brought in the Act on Mortgage Loan and Supervision over Mortgage Brokers and Agents in 2017 to stop this.
So which Polish Banks Lend in ‘other’ currencies?
Due to this ‘new’ act in 2017 it has limited the amount of mortgage lenders in the market that you apply to directly, but you still have options!
Both Pekao and Alior offer mortgages for property purchases ‘abroad’ in Poland, in a different currency than the Zloty.
Alior – offer mortgages in GBP, USD & EUR
Pekao – offer mortgages in GBP, USD, EUR, SEK & NOK
Top Tip: Use a broker instead of going direct to the bank
Mortgage Brokers in Poland
Using a mortgage broker will open up a whole new stream of mortgage lenders in Poland, not just the two mentioned above.
Mortgage brokers like Hypomo for instance are online mortgage brokers and make things sooo easy. You can fill out an application and within 10 minutes you can apply to more than one bank for a mortgage all at the same time. This not only saves time versus applying individually to each bank, it can be better for your credit score. Applying directly can take up to weeks before you are given a decision and in this time you may have lost the opportunity to purchase the property you want, using a broker you no longer have this problem.
Using an online broker mortgage broker like Hypomo is the way forward. Plus you can relax as they are even regulated by the FCA, which is the Financial Conduct Authority in the UK. But the best bit about using Hypomo is that it’s completely free!
Interest Rates in Poland
Currently it’s actually ‘cheaper’ to borrow in Poland than it is in the UK or U.S. This is because the interest rates set by the ECB are below 0%, whilst the BOE base rate [Bank of England] is above 0%. This is liable to change however, as the European Central Bank ‘committee’ meets each month to review these rates.
Using an online broker you will be able to search the whole mortgage market and find the best interest rates, as even just a small percentage difference will equate to alot over a mortgage term of say 20 years.
Do you need a pre approval certificate?
A pre approval certificate is as it sounds its a certificate that shows you have been pre approved for a mortgage loan already. This then makes you completely ready to find and buy a property in Poland. It also means you will be taken more seriously by sellers and as such will be able to negotiate the best prices on the properties you like.