In September, the Mortgage Barometer of Rankomat.pl indicated that the average borrower could borrow 475,000 PLN (~$110,000) from the bank for a property purchase. This is an increase from 426,000 PLN in February, meaning that the credit capacity has increased by almost 50,000 PLN. The availability of mortgage loans has also improved due to the Safe Loan 2 program and lower interest rates.
Rankomat.pl calculates the Mortgage Barometer based on mortgage offers from 12 banks for four common groups of borrowers: singles, couples without children, and families with one or two children. The September barometer already includes changes in banks’ offers, introduced after the interest rates were lowered by the Monetary Policy Council.
“The Mortgage Barometer of Rankomat.pl shows that the availability of mortgage loans is currently the best since 2022, when banks tightened their lending policies due to rising interest rates. The situation has been changing since the beginning of the year, when the KNF eased the rules for granting mortgages. The September interest rate reduction and the preceding decrease in the WIBOR rate by 1.1 percentage points from July significantly improved the availability of mortgage loans for borrowers,” says Konrad Pluciński, rankomat.pl expert for financial products.
A family with one child can borrow 566,000 PLN
A comparison of the standard offer of 12 banks, not covered by the Safe Loan 2 program, shows that a family with one child and an income level of 10,000 PLN per month can expect a mortgage loan of an average amount of 566,000 PLN in September 2023. This is 56,000 PLN higher than at the beginning of the year. The credit capacity range, i.e., the difference between the most liberal and most conservative bank’s offer for this group of borrowers is as much as 331,000 PLN. The highest bank loan offer amounts to 724,000 PLN.
The smallest increase in capacity in recent months has been recorded for families with two children. In September, this group of borrowers could borrow an average of 488,000 PLN for a property purchase, while the highest currently available bank offer amounted to 579,000 PLN. In February, the average mortgage value offered by the banks for this group was 462,000 PLN.
Couples without children have seen a significant increase in average credit capacity. It’s worth mentioning that this group of borrowers is the one that most often buys its first home, which means they are eligible for the Safe Loan 2% program. With earnings of 8,000 PLN, they can expect a mortgage loan of an average of 473,000 PLN. This is 66,000 PLN more than at the beginning of the year. At the most liberal bank in terms of calculating credit capacity, they can secure 580,000 PLN in funding.
The average credit capacity of a single is 374,000 PLN
A single with a monthly income of 6,000 PLN, who plans to purchase a property and cannot take advantage of the Safe Loan 2% program, can expect to receive a loan of an average of 374,000 PLN in September. In his case, credit capacity has increased by 50,000 PLN since the start of the year. Banks’ approach to this group’s credit capacity is the most uniform. The difference between the highest and lowest available credit capacity is just under 100,000 PLN, and the maximum loan amount a single person can expect is 434,000 PLN.
“Not all banks approach the policy of granting mortgage loans in the same way. After the surprising September decision by the Monetary Policy Council to lower interest rates by 0.75 percentage points, only some of the 12 banks we analyzed immediately increased their credit capacity for all customer groups, two institutions as much as 5%. Other banks made smaller moves in their offer or, until the time of our information gathering, left it unchanged. We can expect further changes in the way of calculating credit capacity to appear in the coming weeks. Therefore, when thinking about buying a property on loan, it is always worth comparing several banks’ offers in detail,” says Konrad Pluciński.
Safe Loan 2%
When analyzing the mortgage loan market, it’s impossible to omit the Safe Loan 2% program. Its inauguration in July significantly improved the availability of loans for the purchase of property for people buying their first home. A childless couple or a family with one or two children can get a loan of up to 600,000 PLN, which is the maximum value stipulated in the Safe Loan 2% program. For every one of our model borrowers, this means higher capacity than the average for a standard offer. Exceptions are only singles, who on wages of 6,000 PLN per month can expect a loan with support from the program with an average amount of 493,000 PLN. However, this is still an average of 120,000 PLN higher than the standard offer from banks.
The huge interest in the Safe Loan 2% program (since July, customers have submitted over 43,000 applications for its granting) has resulted in banks being unable to ensure efficient service until now. That’s why the number of loans granted so far is approaching 10,000, and there’s a risk of exhausting the amount allocated this year for state subsidies. The solution to the mortgage bottleneck is the inclusion of two new institutions in the program in September: mBank and BOŚ Bank.
The analysis of rankomat.pl experts shows that the APR (Annual Percentage Rate, the total cost of the loan expressed as an annual percentage of its value), which banks list in their loan offers with public support, ranges from 4.19% to 5.66%. A loan featuring the lowest APR can be obtained from one of the debutants: BOŚ Bank. While the second debutant – mBank – offers a mortgage loan with the highest APR. In the case of the remaining banks, the conditions for issuing Safe Loans 2% have not changed compared to the analysis, which rankomat.pl experts carried out in mid-July.
“The huge interest from borrowers should not surprise anyone. A loan with government support allows not only buying more expensive property thanks to higher credit capacity, but it is also granted on better terms than the commercial offer. The Safe Loan 2% offer is not only lower installments at the start, but also savings counted in tens of thousands of PLN when repaying for the entire loan period,” – says Konrad Pluciński.
The rankomat.pl’s monthly mortgage loan ranking shows that in September, PKO BP offered a standard mortgage with the lowest APR. The mortgage offered by this bank had an APR of 7.37%.
Lower rates mean lower installments
In September, the Monetary Policy Council surprised the market and borrowers with a scale of interest rate reductions by 0.75 percentage points. A further rate cut is expected at the October meeting. This is good news for both people who are already repaying their mortgage and those who plan to take it.
As per www.rankomat.pl expert calculations, September’s rate reduction means – in the case of loans with variable interest rates – a decrease of approximately 48 PLN in monthly payments per every 100,000 PLN remaining to pay back on a mortgage. For those who borrowed 600,000 PLN from the bank, the monthly installment will drop by about 285 PLN.
“Borrowers will not feel the interest rate cuts immediately. According to the terms of the credit agreements, banks will update interest rates with some delay. Every decrease in interest, however, will reduce the difference between standard loans and the offer with the Safe Loan 2%. However, there’s still a long way to go for these offers to converge, which requires a significant drop in inflation, but a lower monthly installment might encourage those who cannot benefit from the Safe Loan 2% to purchase property with a bank mortgage,” says Konrad Pluciński.
Properties are becoming more expensive
The revival on the housing loan market and the increasing availability of this product has a dark side: rising property prices. Prices started to rise in the second quarter of 2023 when an increasing number of customers were informed about the attractiveness of the Safe Loan 2%. Rankomat.pl’s July analysis shows that property prices increased by 12% year-on-year in the second quarter. There are no third-quarter data yet, but monthly data show that prices continue to rise. Rankomat.pl will publish a quarterly report on the property market situation in October.
* Rankomat.pl’s Mortgage Barometer is based on 12 banks’ offers made available for use in the rankomat.pl mortgage comparison tool. These banks include: Alior Bank, Citi Handlowy, Millenium Bank, PKO BP, BNP Paribas, BOŚ Bank, Credit Agricole, ING, mBank, Pekao, Santander Bank Polska and VeloBank. The mortgage loan offer of these banks is checked for the four most common borrower groups: single, couple without children, and couple with one or two children. The assumed LTV is 20%, borrowers have permanent employment contracts, have no other financial obligations and have a positive credit history with the BIK. Credit ability is calculated for standard banks offers, without the support of the Safe Loan 2%. The Mortgage Barometer index is the average of all banks’ offers for four borrower groups.
