If we discuss the issue of the mortgage loans in foreign currency, loans dedicated to foreigners as well as loans for customers with abroad incomes, we should emphasize clearly what is in the scope of the banks’ interests. Banks pay attention to the currency of the income, citizenship and the country where the income is achieved. Please find below the criteria of the mortgage assessment for the clients working abroad – both Polish and foreigners.
Mortgage for investors who achieve income from abroad to purchase a property in Poland.
The customers who are not Polish tax residents have had a drastically changed conditions of taking out a mortgage in Polish banks from July 2014. The reason was the entry into force of Recommendation S, prepared by the Polish Financial Supervision Authority, which contains a recommendations of granting a mortgage solely in the currency of customer’s income, regardless of the amount of that income (Recommendation 6).
Thus, a client who works abroad, may choose in offers of credits from banks that offer loans denominated in the currency of the client’s income.
It needs to be stressed that the Polish Financial Supervision Authority by insisting on the compliance of loans with the obtained income, does not prohibit to grant loans in foreign currencies in its recommendation. However, taking into account the current policy of Polish banks regarding foreign currency loans, it seems that the access to such loans is limited comparing to PLN loans.
At the moment, only a few of Polish banks may grant credits in foreign currencies. It is possible to get a mortgage in EUR, GBP and USD in four banks in Poland. Two banks offer loans in CHF and it is possible to get a mortgage in Norwegian NOK in one bank.
It is important, however, to whom these offers are addressed. They are dedicated for Polish citizens who achieve their income in such currencies as EUR, GBP, USD, CHF and NOK. It means a possibility of getting a mortgage for Polish citizens working, for example, in Great Britain, France, the United States or in Switzerland. On the other hand, our countrymen employed in the Czech Republic, Denmark, Sweden, Canada, Australia or Iceland, may get the mortgage only if they earn in a currency other than the currency of the country of their employment. The other possibility is that the relative person who earns in acceptable currencies (PLN, EUR, GBP, CHF, NOK) may join the mortgage. Thus, it is very rare that a relative (a parent, sibling, spouse) would obtain a higher income than a borrower.
And what about the foreigners who would be interested in investing in real estate market in Poland? At the moment, there are no offers of Polish banks designed for such clients. Due to this exclusion, the citizens of the other states, are forced to invest the loans acquired in their country or to invest their own funds. According to the procedures, Polish banks are not permitted to lend to foreigners. There exists one exception from this policy, but the bank who agrees on accepting mortgages for foreigners, insists on relations with Poland (family, business) and the financing the property to a maximum of 60% of its value.
In practical terms, this bank also draws attention to other points (income, debts) so its decisions are often discretionary.
It may appear the impression that despite the consolidation of international markets, disappearing economic boundaries, the growth of the trade, the banks have the opposite policy. On the one hand, the concern regarding customers’ problems with debt in foreign currencies might be understandable. We should also remember about the recommendations of the Polish Financial Supervision Authority that relate to the security of the mortgage portfolio, which is important for all participants in the real estate market. On the other hand, more attention should be paid to problems of Polish citizens working abroad who plan to purchase a property in Poland for residential purposes. It is clearly visible that the recommendation S might be an issue due to the limited number of banks offering mortgage in foreign currencies as well as uncertainty in the form of currency risk related to the change of currency income. It is also a pity that there is very little interest in foreigners who want to invest in the properties in Poland.
