Secure credit 2%

Going back to the beginning of the year, the market was very much cooled after the interest rate hikes, which effectively discouraged prospective borrowers from taking on a long-term commitment to buy their own property.
An additional factor cooling the enthusiasm of would-be investors was the significantly reduced creditworthiness resulting from the amount of installments that were included in the simulation.
As a result, looking at the results about the loans granted in the last few years, it could be seen that they reached their lowest values in 2022-2023.

The introduction of the government’s housing market assistance program in the form of the 2% Safe Credit program in July 2023 has caused a significant revival in the real estate and related mortgage market. Noting its most important features – it is intended for the purchase or construction of the first residential property, the maximum amount of the loan granted can be 500,000 zlotys or 600,000 zlotys with the simultaneous application of a maximum contribution of 200,000 zlotys.

As is the case with this type of program, there are some limitations related to the fact that maintaining the installment subsidies for 10 years means continuous compliance with conditions related to the need to live in this property, not to rent, not to buy another property. It is important to note, however, that if there were indications related to non-compliance with these conditions, BGK would withhold subsidies from the moment these events occurred. There is no question, however, that we have to return the surcharged interest paid to date. Thus, the often-heard belief that “you have to live in this apartment for 10 years and repay the loan” is not correct – so in practice this means that such a loan can also be repaid, overpaid in the first 10 years and the property rented or sold or moved out of it, with the consequence of ending the loan subsidies, of course. Such a loan will therefore be an ordinary mortgage that customers who did not take advantage of the program pay back.

It happens that customers are quite suspicious of this type of program and in this situation the question often arises “is this loan worth it?“. There is a value of “2%” in the name of the program, and although the formula for calculating subsidies is more complicated and does not lead to a result of 2%, it can be noted that the actual interest rate after the application of subsidies, in the first 5-year fixed rate period, most often exceeds slightly this symbolic 2%. This means, comparing to previous levels of mortgage interest rates, that here we have the cheapest mortgage, which is even lower than loans at a time when interest rates were lowered to the lowest levels in history during the pandemic period.

In recent weeks there has been a lot of news about the exhaustion of the limit budgeted from the budget for the BK 2% Program for 2023-2023. As of today, banks accepting applications in this program have begun to announce the introduction of a temporary suspension in accepting new applications at the end of December. The key will be the publication of the Bank of National Economy, which in early January will summarize the program’s performance to date and actual utilization – not an easy matter given that the loan process took as long as 2-3 months at certain banks during the period of high interest, and actual utilization is, after all, due to signed loan agreements.

The further long-term future of the program depends primarily on the decisions of the newly formed government. For the moment, in the first statements of the Minister of Development and Technology, we could hear about the intention to continue the program of subsidizing the purchase of housing but with significant modifications, which, among other things, would increase the range of potential beneficiaries. Work on this topic is expected to be launched at the beginning of the year. It is worth recalling that during the election campaign among those currently forming the government, we could hear slogans about the 0% mortgage.