- What are the advantages of taking out a mortgage in Poland, rather than in my own country?
- Borrowing in Poland means you secure the loan against the collateral of your Polish property, increasing your borrowing capacity.
- If the loan is in Poland, you can potentially offset the interest repayments against the income of the property in Poland, reducing your income tax liability.
- The range of currencies available from Polish lenders mean that you can borrow in the same currency of your property income, meaning that you repay your mortgage without exchange rate risk and international currency transfer costs.
You are unlikely to be able to secure a mortgage against a Polish property from a bank outside of Poland. Banks are generally unwilling to lend across borders, particularly to a new European Union country. The risks and uncertainties are just too high, and in the case of repossession, your bank would need to deal with an unfamiliar (and potentially costly) legal process in foreign courts.
A bank in your home country will, however, lend against your existing property. Refinancing domestic property in order to purchase in Poland is a popular option, however, you will not benefit from the following advantages of borrowing in Poland against Polish real estate:
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Should I use a specialist credit broker to help me apply for a Polish mortgage?
There are specialist credit companies, who can help you secure a mortgage in Poland. These companies will typically offer pre-approval guidance and take care of the application process. This is an intermediary service which you will be charged for. Whilst some borrowers may be willing to pay extra for such service, going direct to the Polish banks is cheaper and you will have a greater choice of loan options. Furthermore, such companies offer mortgages in numerous countries around the world, meaning their expertise in the Polish market may be restricted.
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How do I select the most appropriate borrowing currency in Poland?
Polish mortgages are currently available in a range of different currencies – EUR, GBP, USD, CHF and PLN. The main risk of borrowing in a foreign currency is that the cost of the loan is unpredictable as a result of exchange rate fluctuations between the loan currency and the currency of your income.
For example, a UK investor being paid in sterling, who took out a PLN loan in late 2003, would have seen the real cost of their loan increase by 15% due to the appreciation of the PLN against sterling.
For this reason, Poland Mortgage Direct recommends taking out a loan in either the same currency that you are paid or the same currency of the income of your property, unless you are comfortable with the risk and hope to profit from a positive currency movement. Some lenders we deal with stipulate that the loan currency must be the same as the income currency of the borrower.
Whilst loans in Swiss Franks (CHF) currently offer the lowest interest rates, a Euro-denominated loan is perhaps the most popular choice for foreign investors in Poland. Euro loans in Poland offer competitive interest rates and the zloty will soon be pegged against the Euro in advance of Poland adopting the Euro as it’s currency in the near future.« Hide
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What is the range of mortgage products available to foreign investors looking to borrow in Poland?
See our mortgage products page for more information.
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How are interest rates determined for Polish loans?
See our mortgage products page for more information.
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Are interest-only loans available to foreigners looking to buy property in Poland?
No, interest-only loans are not currently offered. See our mortgage products page for more information.
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Are fixed rate loans available to foreigners in Poland?
Yes, but most loans offered to foreigners in Poland are variable rate loans based on interbank rates plus the bank’s margin. See our mortgage products page for more information.
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Can I secure a ‘buy to let’ mortgage in Poland?
Yes, buy-to-let mortgages are available. Typically, 50% of the prospective rental income will be taken into consideration by the lender when determining your eligibility and the terms of the loan. Please note that Poland does not have a tradition of renting comparable to Western Europe or the USA – potential investors in Poland should not be too reliant on a high (or stable) rental income to service a Polish mortgage See our General Mortgage Information page for more details.
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Can I take out a mortgage in my Self investment Personal Pension (SIPP in the UK)?
No mortgage products are currently available from Polish lenders for investors who wish to borrow within their personal pension. See our mortgage products page for more information.
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Are discounted mortgage products available?
Yes, there are products available from Polish lenders which offer a discounted interest rate period. See our mortgage products page for more information.
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I want to draw down my mortgage in stage payments to finance the purchase of an off plan development in Poland. Is this possible?
Loans for such developments are referred to as primary market loans, and are available from most banks who lend to foreigners. The loan may be drawn down in stages based on the payment schedule as presented by the developer, housing association or specialized construction company. Such loans will be interest-only until the whole loan amount has been drawn down.
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Can I get pre-approval for a mortgage (a loan promise) before I start looking for a Polish property?
Yes, the banks we deal with will give you pre-approval for a loan. See our application process page for more information on pre-approval and the documents you will require to secure a Polish mortgage.
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How long does it take to get a loan promise following my initial enquiry with the bank?
After receipt of a completed application form for an individual with employment (salary) details, the process of receiving pre-approval for a mortgage with a Polish lender should take approximately 3-5 days. Pre-approval for self-employed (or limited company employed) individuals will take longer, approximately 10 days. Please refer to the application process page for more information and advice about how to secure a Polish mortgage.
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Can I open an escrow account if I am in negotiations to buy a property?
There is the possibility of opening an escrow account if you are in negotiations to buy a property. An escrow account is opened once a preliminary sales contract has been signed. It is the result of an agreement between a bank, a vendor and a buyer. The account is held under the vendor’s name, but none of the parties have access to the funds. The money cannot be released until a notarial deed confirming absolute purchase and ownership is signed or a formal notary notice is issued. The escrow account benefits the vendor as they can be sure they will receive due money without delay, and the buyer, as they can feel secure that if a transaction is not finalized successfully, they will not lose their money.
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I have equity tied up in a Polish property that I wish to release. Is it possible to refinance my existing property?
- An investor who already owns a Polish property, who wish to get access to some of the equity of the property without having to sell it.
- An investor who bought a property with cash, but wish to release some of the equity after the purchase
- An investor who has a property in Poland which already has a loan secured against it, but wishes to increase the loan to a higher loan to value, perhaps because the property has risen in value.
- An investor who wishes to move their mortgage to another lender to gain access to a more competitive mortgage product.
There are a number of scenarios whereby an investor wishes to release equity from, or re-mortgage, an existing property that they own in Poland, which primarily fall under the following categories.
Many investors use refinancing to continually release equity from their existing property to buy others.
Currently re-mortgaging options are not as flexible in Poland as abroad, meaning that many of the above options are not available. Some banks do offer to secure a mortgage against an existing property; however, it must be done within a limited time frame after the property purchase (approximately one year).
Additionally, it is possible to increase the amount of the mortgage against the value of the property if there is already a mortgage secured against the property, however, the banks will not take into account the increase in value of the property, but will only lend against the purchase price of the property.
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What are the tax implications of taking out a Polish mortgage?
Taxation is an important consideration when taking out a mortgage in a foreign country. If your Polish mortgage is for investment purposes, you should be able to offset interest payments on the loan as an expense against rental income from the property.
We suggest speaking to your accountant or lawyer to determine the exact tax implications of taking out a Polish mortgage.« Hide
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How does Poland Mortgage Direct make its money?
We don’t charge you for the services we provide. Should you decide to take out a mortgage with the lender we have referred you to, we will receive a commission from this lender.
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What are the benefits of using the services of Poland Mortgage Direct?
- It is free. You do not pay anything for making use of our referral service.
- You access local knowledge of the Polish mortgage market, saving yourself time and money.
- You access a wider range of loan products from different English speaking lenders, meaning you are more likely to find yourself the most competitive mortgage product.
- Direct access to the Polish lenders meaning that you benefit from competitive rates without the additional charges of a middle man.
- Pro-active online support from native speakers of English for registered clients who wish to clarify questions regarding their mortgage applications.
The process of finding a suitable and competitive mortgage product is potentially time consuming and frustrating for the investor, particularly in a foreign country where people speak a foreign language. In a developing market where products are difficult to find and poorly advertised, Poland Mortgage Direct aims to make this process as hassle-free as possible.
The benefits of using our services include the following:« Hide
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What is the application process for acquiring a mortgage in Poland?
See the application process page on this website for detailed information.
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What do I need to know about the risks? What do I need to know about the risks?
It is important to research all possible costs associated with purchasing a property in Poland. You may be charged government costs in addition to your lender’s costs, but you will be notified of these costs when offered a mortgage.
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What is a sanctioning fee?
A charge levied by a lender for setting up a mortgage. Sometimes, this is referred to as an initial charge or arrangement fee. In Poland, this fee ranges from 1-2.5% of the value of the mortgage, though some banks offer promotional reductions on this fee from time to time.
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What money do I need up front in order to take out a loan?
You will need your deposit (down payment). For example, if you take out a euro 100 000 loan with an LTV of 70%, you will need euro 30 000 upfront. In some cases, lenders will add their fees and charges to the loan amount.
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DISCLAIMERFigures and information provided on this website are meant purely as an indicator of the loan products available through our affiliated mortgage lenders. Specific questions, such as those regarding commission, redemption penalties and paperwork requirements, should be aimed directly at the mortgage lenders themselves.
Your home may be repossessed if you do not keep up repayments on your mortgage.
The value of your loan repayments under a foreign currency mortgage can fluctuate in value if your income is not paid in the same currency.