Mortgages for foreign citizens in Poland in 2021

Foreign citizens who decide to acquire residential or commercial real estate in Poland, but do not have all the necessary amount for the purchase, should not despair - a mortgage in Poland in 2021 is available not only for citizens of this country. Polish banks willingly provide loans for the construction or purchase of real estate to foreign citizens, offer favorable lending terms and low interest rates on mortgage loans. To obtain a mortgage in Poland, foreigners must comply with several rules and prepare all the necessary documents.

Acquisition of real estate in Poland

Real estate in Poland is increasingly attracting citizens from the CIS: since 2021, citizens of Ukraine and Russia have taken the leading positions among foreign buyers. It should be noted that the ownership of an apartment, house or land plot in Poland by a foreigner does not in the least simplify the process of obtaining a Polish residence permit or citizenship.

In the same cases when commercial real estate is purchased (which will contribute to the development of the country's economy), small preferences from the Polish state are possible - for example, when obtaining a residence permit status or when applying for visas: you can register in your home, you do not need a hotel reservation, and etc.

The reasons for the popularity of the acquisition of Polish real estate are different, namely:

• at affordable prices not only in comparison with other EU countries, but also with housing prices in the Russian Federation, Ukraine and Belarus;
• in the wide possibilities of mortgage lending;
• in the opportunity to profitably invest and make a profit.

Real estate prices depend on its size, on which city it is located, as well as on its location in the city itself. The highest prices are from 6 to 9 thousand zlotys per sq. m - in Warsaw, Krakow, Gdansk, Poznan, Wroclaw; lower - from 4 to 5 thousand zlotys per sq. m - in Lodz, Przemysl, Szczecin.

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Mortgages: interest rates, loan payments

In order to avoid troubles when paying off a mortgage loan, you should thoroughly familiarize yourself with the terms of its registration, calculate all the necessary payments and your own capabilities. In Poland, the attitude towards debtors on loans is extremely negative, and one should not count on the state's help.

A great help can be provided by the Polish financial and business portal www.bankier.pl, which since 2000 has been providing visitors with reliable information, helping to make the right decisions in the field of investment, business, and personal finance management. On the site, you can select the best offers from banks, get up-to-date information on annual mortgage rates, calculate the size of payments using a calculator.

A lot of useful information about the functioning of the banking system in Poland can be obtained by reading the article "Banks and the banking system in Poland".

In most cases, loans for the purchase of housing in the Republic of Poland are issued in the national currency - zlotys (PLN).

Since 2021, the minimum initial contributions for real estate have been increased in Poland. If earlier banks could cover 100% of the cost of housing with a mortgage, now, on the recommendation of the Polish Financial Supervision Commission, they can issue a loan in the amount of 80% of the value of real estate (up to 90% - at the discretion of the banks themselves).

Depending on this, the calculation of the mortgage loan payment occurs. Payment includes:

• variable (WIBOR - Warsaw Interbank Offer Rate) is the percentage base exchange rate between banks in the interbank market. Its average value is revised, as a rule, every 3 months (3M) by the Polish Monetary Policy Council (RPP - Rada Polityki Pieniężnej), so it can change both upwards and downwards. In 2021, individual banks can settle once every six months or a year;
• one-time commission for granting a loan (marża). This commission is set when a loan is issued, is fixed in the agreement and does not change anymore. The amount and term of the loan, the amount of the first installment, the bank's promotional offers, etc. may affect the amount of the margin. The less the bank invests in the purchase, the less the amount of the margin will be;
• the actual annual interest rate (Oprocentowanie / RRSO), which is calculated taking into account banking costs, the amount of the loan, the period of time for which the mortgage was issued, insurance, etc. The monthly payment amount (rata) depends on it.

You can pre-calculate the costs using the calculator (kalkulator kredytów (hipotecznych)) at www.bankier.pl/.

To calculate the percentage RRSO (rzeczywistej rocznej stopie oprocentowania) and monthly payment (rata) you should:

• go to the website and select the subcategory “Kredyty hipoteczne” in the “Twoje finanse” column;

• on the page that opens, open the options "Pokaż opcje zaawansowane" and enter the necessary data, for example: the cost of the apartment - 200 thousand zlotys, the amount of the loan - 180 thousand zlotys, the borrower's age - 30 years, the loan repayment period - 35 years;

• in "Kredyty hipoteczne - Sprawdź ofertę" select "Sprawdź ofertę banków";

Based on the calculations obtained, it is possible to compare the offers of different banks. So, the margin can be from 1.89 to 2.92%, RRSO - from 4.05 to 5.35%, rata - from 754 to 866 zlotys. Having chosen the most suitable option, you can use the services of a consultant (doradca finansowy or hipoteczny) of this or that bank, who will check the client's creditworthiness, suggest the best option, send an application to the bank and help in bargaining with the seller. These services are free for the buyer - the consultant receives a commission from the bank for the loan issued.

In addition to these payments, you should prepare for the following expenses:

• initial payment (minimum - 10-20% of the value of the property, depending on the bank). The amount of the contribution is also influenced by the creditor's salary: the lower it is, the greater the contribution;
• bank commission (prowizja) - from 0% and more. Often the bank requires you to pay it even before the mortgage is issued, sometimes it is included in the loan amount and monthly payments. You can get rid of the need to pay commission by using one of the additional products offered by the bank;
• documentary insurance (ubezpieczenie pomostowe). In order to reduce the risk, the bank can be entered into Section IV of the Land Register (ksiega wieczysta) until the full repayment of the mortgage loan. Before the entry is made (this may take some time), the bank may increase the margin or charge additional fees for risk insurance;
• payment for real estate appraisal (oplata za wycene nieruchomosci) by a bank employee or a third-party expert;
• additional life insurance of the borrower (inne ubezpieczenia);
• other fees and commissions (inne oplaty i prowizje). Such payments may arise if you wish to repay the mortgage ahead of schedule or if you do not pay money on time (the agreements contain a list of payments in such cases).

Registration of a mortgage in Poland by foreign citizens

Citizens of EU countries have the opportunity to apply for a mortgage in Polish banks on the same terms as Poles. Mortgages for foreigners - citizens of countries outside the EU, including the CIS, are possible only after a thorough check of their compliance with certain criteria and the provision of some additional documents.

For details on the conditions for obtaining a loan for the purchase of real estate by foreign citizens, see the article "Mortgages for foreign citizens in Poland in 2021".

Bank requirements for CIS citizens

It should be noted that there is no single list of additional requirements for a foreigner to issue a loan, so each bank can establish its own rules. So, in some cases, the presence of a Pole's Card can significantly simplify obtaining a small loan, sometimes, if necessary, a foreigner may require a Residence Card.

Most often, Polish banks put forward the following requirements to foreigners:

• verify the identity of a foreign citizen (valid passport);
• confirm the legality of the applicant's stay in Poland for a loan;
• confirm the presence of a Polish residence permit (meldunku);
• indicate the legal source of income (must be documented);
• have a positive credit history (in Poland or in the country of residence);
• have a PESEL number.

What documents will be needed when applying for a loan and how much will it cost

The package of necessary documents for obtaining a mortgage loan includes:

• international passport;
• a permanent residence card in Poland (karty stałego pobytu) or a temporary residence card (karty czasowego pobytu) for at least 12 months. In the second case, the terms of the loan will correspond to its validity period;
• certificate of payment of taxes (zaświadczenia o niezaleganiu w podatkach);
• a salary certificate for the last three to six months (if you have an open-ended employment contract - umowa o prace na czas nieokreslony);
• a contract for a year in advance and a certificate of income for the last three to six months (if there is an employment contract for a specific period - umowa o prace na czas okreslony);
• a certificate of income for the last six months or a year (for employment in Poland under a contract under a contract - umowa zlecenia / o dzieło);
• a certificate of income for one to two years (when running your own business in Poland);
• police clearance certificate (zaświadczenie o niekaralności);
• Polish BIK report (Biuro Informacji Kredytowej), certificate of PIT payment and history of the movement of funds in the applicant's bank account;
• preliminary agreement (umowa wstępna) with the builder (developer) or with the seller of real estate;
• permission from the Minister of the Interior of Poland for the purchase of real estate in the event of a purchase of a house or land plot by a foreigner who has lived in the country for less than five years. A permit is also required to purchase any real estate that is located in the border zone.

It is also necessary to fill out a special questionnaire at a bank branch or online on a bank website.

Banks charge a one-time commission for their services - up to 3.5% of the loan amount.

The borrower also pays for the services of a bank representative (within 200-300 zlotys), who, prior to signing the contract, inspects the real estate (opinia rzeczoznawcy) in order to verify its existence, whether the declared value matches the real one, and to sign annexes to the contract. Most often, such an inspection is carried out if a new or unknown company acts as a developer, as well as when buying a secondary housing stock.

Issuance of permits of the Ministry of Internal Affairs of Poland will cost together with a state fee of 1,848 zlotys.

Registration of relationships with the bank

Practice shows that for a mortgage loan foreign citizens most often apply to those Polish banks, of which they are already clients. Without a bank account, it is extremely difficult and irrational to live in a country with a stable banking system and developed online banking.

Moreover, it is very easy to open an account in a Polish bank - this requires a minimum of documents: a passport with a visa and a residence card. Bank account and standard bank card are provided free of charge (until August 8, 2021).

Another advantage of opening an account in a Polish bank is the ability to get a small consumer loan. After the timely payment of all obligations associated with it, information about a positive credit history will go to the Bureau of Credit Information (BIK), which can play a decisive role when considering a mortgage loan and making a positive decision.

The algorithm for obtaining a mortgage loan in Poland is simple:

• signing a preliminary contract with the developer / seller;
• handling a package of documents to the bank;
• consideration by the bank of the application and verification of all data (within 7-14 days);
• signing a loan agreement (ustanowienie hipoteki). All its conditions are negotiated individually between the bank and the borrower, including the method of transferring money to the seller of real estate: to his bank account, through a bank depository or others.

After that, you can sign the final agreement with the seller at a notary, make a request to the Cadastral Department. As soon as the buyer submits the contract to the bank, the bank will transfer the money to the seller within the agreed time frame.

Find out more about how to get a loan in cash or for housing in a Polish bank

Additional payments and taxes when applying for a mortgage

Additional payments when buying real estate on a mortgage primarily means the fee for notary services (notary fee). In addition, the corresponding taxes in Poland must also be paid.

The notary determines the amount of remuneration at his own discretion, depending on the value of the real estate, which was indicated by the parties, but he has no right to demand an amount in excess of the rates established by the order of the Ministry of Justice of Poland "On maximum rates of notary fees" No. 1564 of June 28, 2004, plus VAT (23%).

According to paragraph 3 of the regulation, with a property value of 60 thousand to one million zlotys, the rate will be 1,010 zlotys plus 0.4% of the transaction amount. Registration of a transaction in the amount of one to two million is already estimated at 4,770 zlotys and 0.2% of the amount.

For example, when buying an apartment worth 200 thousand zlotys, the notary's fee will be: 1010 (rate) + 800 (0.4% of the amount) + 416.3 (23% VAT) = 2226.3 zlotys.

All notary offices strive to set the maximum bar, so it is advisable to first familiarize yourself with the expected payments; in case of excessive requests, you can always contact another notary.

In addition to the fee, the notary also takes payment for:

• drawing up extracts from the act (on average PLN 6 per A4 page). At least six extracts are required - in the Ministry of Internal Affairs, the court (in whose department the house register is located), the geodetic service, the treasury and the contracting parties;
• court fee for a statement on the need to make an entry in the house book (200 PLN net), in the absence of a house book - an additional 60 PLN (net) for an application for its production.

The parties bear these costs in half.

Interesting fact. According to Polish law, the amounts of real estate transactions can be reviewed within five years from the date of conclusion. This is done in order to combat the understatement of real prices, in order to reduce the transaction amount and reduce the tax.

In the case of buying a real estate of a secondary housing stock, the buyer must pay a civil action tax in the amount of 2% of the taxable base (market value of the property). In the case of buying a home from the developer, this tax is not charged.

Another additional cost item for the buyer when concluding a mortgage agreement is the so-called mortgage tax (Podatek od czynności cywilno-prawnych (PCC), which must be included in the agreement with a notary or paid at the tax office within 14 days from the date of purchase of real estate (form tax return PCC3) The tax rate is 0.1%.

Banks of Poland popular with foreign citizens

Poland has a stable banking system: dozens of Polish and foreign banks operate in the country. Citizens of other countries who are going to get a mortgage are primarily interested in those banks in Poland that work with foreigners, are ready to provide them with a loan, offering the most profitable options, and, moreover, are reliable.

Speaking about the terms of crediting, it should be noted that those foreign citizens who have received a permanent residence card in Poland have great chances to get a loan for a long term (for 30-45 years). It is more difficult for foreigners - holders of a temporary residence card in Poland - the loan will be issued for a period not exceeding the validity period of the card.

The most popular banks among foreigners include:

• MBank.The requirements for foreign citizens are the most loyal here: a minimum of documents, the possibility of online registration, a quick decision (when there is a positive credit history and cooperation with this bank, then in 1-2 days). The bank can verify the fact of employment by contacting the client's employer. The disadvantage is the higher interest rate.
• Millenium. The bank has experience of working with citizens from Russia, Ukraine and other CIS countries and a large number of branches throughout the country. You can submit an application and open an account through the bank's website. To apply for a loan, you need to provide a passport, an agreement with an employer, a certificate of income for 3 months, a residence permit.
• WBK Bank Zachodni. The bank works with citizens of the CIS, but puts forward more stringent requirements for clients. It is possible to apply online through the website (although a personal visit is still necessary - to sign a loan application), however, the bank will request and verify an identity card, residence permit terms, salary and credit history, information about the employer, etc.
• ING Bank Slaski requires foreigners to confirm the terms of a residence permit, provide proof of solvency (you can provide umowa o dzieło or umowa zlecenia). Down payment - at least 20% of the value of the property;
• PKO Bank Polski. The minimum initial payment is 10% of the property value. The bank provides mortgage loans to citizens of the CIS, but requires confirmation of credit and banking history, solvency, as well as permission from the Ministry of Internal Affairs of Poland to purchase real estate in the country.

Interesting fact. One of the oldest banks in Poland, PKO Bank Polski (founded in 1919), in 2004 became an investor in Lviv “Kredobank”. Thus, the bank resumed its activities in Lviv after 65 years - until 1939 the bank's office was already in this city.

Let's summarize

It is quite possible to get a mortgage loan in Poland for CIS citizens. If a foreigner legally resides in Poland, is officially employed and has a source of constant income, an impeccable credit and banking history, as a rule, he will be able to get a mortgage loan without any problems.

To purchase real estate in Poland, you need to pay (depending on the bank) from 10 to 20% of the value of the property. There are also three important points to note:

• in some cases, it is necessary to obtain permission from the Ministry of Internal Affairs of Poland to purchase real estate;
• choice of a bank (requirements for the procedure for granting and processing a loan may vary greatly);
• additional costs (for registration of a transaction, a notary).

In return, a foreign citizen will receive his own housing, which he has the right to dispose of at his own discretion: to live in it or rent it out. Having your own home in Poland gives some advantages: this circumstance can contribute to obtaining a multivisa, gives the right not to confirm a hotel reservation when applying for a Polish visa, but simply register in your apartment (which will be a plus when applying for a residence permit), in addition, it allows you to buy a car in Poland and register it at the place of registration.