Mortgage - opportunities and threats

Ostania aktualizacja 7 March 2023

The report of the Polish Bank Association shows that the number of housing loans taken is constantly increasing in Poland. Currently, over two million loan agreements with banks are concluded in Poland, which is a colossal number, increasing every year.

Why do Poles take more and more loans, do they manage to repay them and what opportunities and threats does the mortgage have?

Poland is one of the countries with the highest percentage of adults living with their parents. The motivation to take out a loan for a flat with the help of programs such as “Flat for the Young” is very strong. On 08.08.2017, sixty-three million zlotys were added to the pool of the Youth for Program program, which was exhausted within a few hours.

It is no wonder that in such a reality, more and more people are choosing a mortgage, which has been operating under the new rules since 2016. One of the conveniences for the client is the fact that the bank must decide whether to grant a loan or not to grant it within twenty-one days of submitting the application. As a result, borrowers had a more clear and complete idea of when they would be able to make a purchase.

Of course, withdrawing from the contract within fourteen days of its conclusion together with an insight into the conditions is still current law. Such records make people taking a mortgage feel definitely more secure, being aware that this is not a final decision defining their life path.

However, the decision is not so simple, and most of the problem always remains with the person taking the loan. Mortgage costs include a bank commission, mortgage establishment, notary costs, establishing a land and mortgage register for real estate that does not have it or when a separate property is created. Accident insurance with the assignment of rights from the policy to the lending bank. Life insurance with assignment to the bank, total cost of the loan, i.e. the sum of all costs related to the loan and possible contractual penalties for early repayment of the loan.

The list is long, full of unclear obligations, and is one of the basic reasons why people refuse to get a loan.

People think about paying back mortgages, they have people close to retirement, or a terrifying void. When the average amount of such a loan ranges from two hundred and fifty to five hundred thousand zlotys, we cannot imagine how much money it is compared to ordinary life.

The pressure on the lips is that such a mortgage probably pays off all life, or not at all. The reality is, however, that after the credit crisis taken in francs, the number of loans sold to debt collectors increased. Although it sounds terrible, because the specter of a bailiff taking an apartment is shocking for people, especially when they are supporting their children, it should be noted that this number increased from two to two and a half six tenths of a percent. All the rest of the people either paid their debt or they still pay it off.

The business cycle changes many times throughout a person’s life in one country. On average, a European changes his clothes seven times in his lifetime. If we take a mortgage for a dozen or so or several dozen years, with a view to our current financial status, career and health, we are wrong.

Studies show that people can hardly predict themselves in ten years. We do not know whether the company we work for will fail, whether our business will survive or if our health will not deteriorate. We have no idea if our values will change and maybe we will visit the lives of several dozen years in one apartment or house.

The psychological costs to be incurred along with the cost of the mortgage are as huge as the loan itself. You should be aware that the main motivation of such an undertaking is the reluctance to pay the installment to the owner of the apartment every month, which can drain the budget of most people. However, what we mention the lack of this fee and the awareness that although theoretically the apartment is ours, it is able to harm the family situation much more.

The general trend in taking a mortgage is that younger people are more sorry than older ones. This kind of commitment he attaches to a certain place and mode of functioning, does not allow for the freedom that young people value so much in their first half of life. The fact is that the situation on the housing market in Poland is constantly changing, but situations in which young people will be able to buy a flat or a house with their own money are a distant future and affect a smaller part of the population.

Therefore, a mortgage should be considered when referring to whether our earnings allow us to postpone the installment amount regularly? Does our education and experience allow you to find work when you lose your previous source of income? Do we want to stay in the place where you buy the property until the loan is repaid, or are you planning to rent it to someone else? It is only after these questions that we can think about whether in our life situation a loan is really a viable option.