Low-cost mortgage program The government introduced a low-cost credit program on 1 July 2023. Below, we present the key objectives of the program:
• The program is dedicated to people < 45 years old and those, who do not possess (and did not possess before) a flat or a house.
• The beneficiaries are obliged to meet the creditworthiness conditions.
• The surcharges will comprise the difference between the average mortgage rate multiplied by 0.9x, decreased by the bank margin, and a fixed rate of 2%.
• There will be no limit regarding the average dwelling price per sqm., however the maximum value of the mortgage is set at PLN 500k (for individual persons) or PLN 600k (in the case of marriage couples).
• The clients’ own contribution cannot exceed PLN 200k.
• The subsidies will last for 10 years.
• The minimal duration of the mortgage is 15 years.
• The average credit margin will not be higher than in other types of mortgages.
• The clients may join the low-cost mortgage program with the “Dwelling without a personal contribution” program.
• The purchased dwelling may not be rented out.
Moreover, Mr. Waldemar Buda, the Minister of Economic Development and Technology, informed the public that the program will last for 5 years and the expected number of beneficiaries may amount to 200k people, which implies ca. 40k beneficiaries per year (according to the latest statements, the Minister assumes that the number of submitted motion will amount to >50k in 2023E).
We note that according to BIK data, the banks granted 272k and 132k mortgages in 2021-22, respectively (we point out that 2022 numbers were decreased by a significant drop in creditability, driven by an increase in interest rates).
Thus, the potential recurrent impact of the program may amount to 15-20% in the case of granted mortgages per year. We note that the vast majority of developers stated that they had observed an increasing number of inquiries and reservation agreements in previous months, which should be transferred into final agreements in 3-4Q23E. Thus, we presume that the program will strongly support pre-sales volumes in 2H23E and in coming years. Furthermore, some clients, who already have creditworthiness, may decide to speed up their purchase decisions to avoid expected dwelling price hikes in 3Q23E.
