After several months of rapid increase in mortgage rates, the rates increase has slowed down. In the July ranking, the banks’ offer for borrowers buying an apartment costing 600,000 zloty.
Mortgage loans with fixed interest rates
In just a few months, mortgage loans with periodically fixed interest rates have become the most frequently chosen option by clients looking for financing to buy a property. The reversal of borrowers’ preferences is the result of, inter alia, rapidly rising interest rates, but also a wider availability of “fixed-rate” mortgages from mid-2021.
In the July mortgage loan ranking, we present banks’ proposals for a “two plus one” family living in Warsaw. The choice of profile clients fell on a 55-metre apartment from the secondary market, costing 600000 Zloty.
We assume that borrowers have a total of 13,000 at their disposal every month zloty. A 29-year-old woman is employed under an employment contract for an indefinite period and earns PLN 7,000 PLN net. Her 32-year-old partner has a similar situation, but slightly lower earnings 6,000 PLN per month.
The couple is currently not paying off any loan obligations, and the history of borrowers recorded in BIK does not contain negative entries. We assume that customers are willing to take advantage of additional products in exchange for better loan terms, with the exception of investment products or insurance with equity funds. Therefore, the simulations presented by the banks assume cross-selling.
Cheapest loans with a 20% own contribution
With a standard, 20% own payment, the loan amount is 480000 zloty. Borrowers must then contribute with 12000 PLN of savings. Most institutions propose a 5-year fixed rate period, after which the borrower can choose to switch to a floating formula or a new fixed rate.
The exceptions are Alior Bank and Credit Agricole, in which this period is longer – 7 years. BNP Paribas Bank also offers a 10-year “freeze” period, but for several months it has been serving only existing customers .
|Loan for PLN 480,000, 25 years, LTV 80%, interest rate periodically fixed (for profile borrowers)|
|No.||Bank||Interest||Margin after the fixed rate period||Instalment equal to (1)||Total cost of the loan (2)||APRC (3)|
|1.||Santander Bank||8.29%||1.79%||PLN 3 797||670 567 PLN||9.03%|
|2.||BPS bank||8.67%||1.67%||PLN 3 881||PLN 688,742||9.63%|
|3.||ING Bank Śląski||8.49%||1.64%||PLN 3,851||PLN 695,874||9.14%|
|4.||PKO BP (4) (5)||8.04%||1.44%||PLN 3 724||702 278 PLN||9.39%|
|5.||PKO BP (4)
|8.09%||1.49%||PLN 3 740||PLN 706,868||9.44%|
|6.||Citi Handlowy||9.05%||2.19%||PLN 4,049||PLN 737,057||9.52%|
|7.||Alior Bank||9.28% (6)||1.99%||PLN 4 120||PLN 740 362||9.72%|
|8.||Bank Millennium||8.85%||1.99%||PLN 3,978||PLN 749,996||9.56%|
|9.||Credit Agricole||8.85% (6)||1.95%||3 982 PLN||PLN 750 288||9.73%|
|10.||Bank Pekao||8.88%||1.94%||PLN 4 321||PLN 754 122||10.78%|
|8.95%||2.21%||PLN 4 015||PLN 757 728||9.94%|
|12.||BNP Paribas Bank (7)
|9.30%||2.05%||PLN 4 130||PLN 786 487||10.50%|
|13.||BOŚ||10.36%||1.99%||PLN 4,484||PLN 801 130||11.05%|
|9.44%||2.19%||PLN 4,175||PLN 856 574||11.20%|
|(1) Monthly payment after paying the bridging insurance.
(2) The total cost of the loan is the sum of interest, commission, cost of bridging insurance, low deposit insurance and the cost of other insurances, excluding property insurance. The cost is based on simulations prepared by banks.
(3) Actual Annual Interest Rate provided by the bank in the simulation.
(4) The bank applies a lower interest rate in the first 12 months. The rates are given after the 12th month, taking into account the reduction by 0.5 pp. as part of the ongoing promotion.
(5) Offer for customers who have had a current account in the bank for at least 6 months.
(6) The interest is fixed periodically for 7 years.
(7) The bank offers mortgage loans only to existing customers – a 3-month period of using the products is required.
Source: Bankier.pl based on information from banks, July 13-19, 2022.
Santander Bank, Bank BPS and ING Bank Śląski were at the top of the list. The rates proposed by banks in July do not differ significantly from those announced a month earlier, but it is worth noting that in several institutions they are lower than in June. Double-digit mortgage rates did not become the standard, although in May 2022 it looked like the beginning of a “new era”.