Lack of specifics about a new state support program for property buying and anticipation of an interest rate cut have led banks to ease the terms of mortgage lending. 6 out of 10 banks analyzed by rankomat.pl, have reduced mortgage rates and increased creditworthiness in the last quarter. The average mortgage that customers can currently receive is 488 thousand PLN.
The Mortgage Barometer Index is calculated by the multi-comparison site rankomat.pl based on the standard offers of mortgage loans from 10 banks, taking into account the four most common borrower profiles: singles, couples without children, and families with one and two children. At the beginning of September, the value of the Mortgage Barometer was 488 thousand PLN, 3 thousand PLN higher than before the holidays. 6 out of 10 banks analyzed by rankomat.pl decided to loosen their lending policies. The leaders are Velo Bank and Credit Agricole, which have increased the average creditworthiness for customers by more than 40 thousand PLN over the quarter. Meanwhile, four banks tightened their approach to mortgage clients – most notably, Santander Bank Polska, which decreased the credit capacity for the average customer by as much as 84.3 thousand PLN during the quarter.
According to Konrad Pluciński, a mortgage market analyst at rankomat.pl, “The last two months have brought a significant improvement in creditworthiness. Banks are trying to encourage customers to make decisions about purchasing properties more quickly, as interest in buying has fallen greatly. The ‘2% Credit’ is already a thing of the past, and for several months we have been witnessing squabbles in the government over the continuation of this program. Decisions about buying properties cannot be postponed indefinitely. Thus, people who have been waiting since the beginning of the year to buy an apartment or house with the launch of a new program, can now decide to buy properties without public support. Additionally, apartment prices have finally stopped rising, and the first decreases have appeared on the market. Combined with a greater credit capacity, this is a factor that facilitates decisions about buying a dream home.”
The Mortgage Barometer confirms this thesis. The biggest increase in creditworthiness applies to groups of borrowers who do not have children. Singles and childless families were not the main recipients of the government program, which is supposed to replace the ‘2% Credit’. Therefore, in their case, further delay in purchasing properties may not be justified. A single person with monthly income of 6 thousand PLN net can expect a mortgage loan of 386 thousand PLN at the beginning of September. This is 5 thousand PLN more than before the holidays, and 10 thousand PLN more than at the beginning of the year. VeloBank offers the most for such a borrower (442 thousand PLN), and Santander Bank Polska offers the least (327 thousand PLN).
A childless couple with monthly incomes of 8 thousand PLN net can expect an average loan of 477.5 thousand PLN. In their case, the capacity has increased by 3 thousand PLN compared to June, but is 8 thousand PLN less than in January. For this group, creditworthiness ranges from the most liberal to the most conservative bank offer amounts to 213 thousand PLN.
Less favorable is the case for families with children, the main target group of the new government support program for the purchase of properties. A couple with one child and incomes of 10 thousand PLN net per month could borrow an average of 575 thousand PLN. That’s 1 thousand PLN less than in July and more than 11 thousand PLN less than at the beginning of the year. This group of borrowers can get the largest loan at Velobank (590 thousand PLN), and the smallest at BNP Paribas (446 thousand PLN), meaning that the range of credit capacity is as high as 242 thousand PLN.
The situation is similar for a family with two children with monthly incomes of 10 thousand PLN. At the beginning of September, this group of borrowers can expect an average mortgage loan of 515 thousand PLN. The result is 1.3 thousand PLN higher than before the holidays, but as much as 12 thousand PLN less than the credit capabilities at the beginning of the year. Alior Bank is willing to lend the most to this group of borrowers (660 thousand PLN), while ING Bank Slaski the least (407 thousand PLN), making a difference of a quarter of a million PLN.
“The biggest improvement in creditworthiness occurred in Velo Bank this August. On average, borrowers could receive a loan amount 4.95% higher than at the beginning of the vacation. Additionally, this bank has increased capacity three months in a row,” says Konrad Pluciński. “In Alior Bank in August, creditworthiness increased on average by 4.39%. This was the second month of an easing credit policy. Meanwhile, at BNP Paribas Bank, capacity improved by 3.59%.”
“There was also a significant change at Pekao SA Bank since the beginning of the holidays. In August, the bank decided on a correction, but thanks to a significant positive change in July, it still offers a significantly higher loan amount than in June at the same income level of borrowers.
In addition to increasing creditworthiness, 7 out of 11 banks analyzed by rankomat.pl have decided to lower the interest rates offered on mortgage loans. None of them raised interest rates, while four left them unchanged. The greatest correction was more than 0.6 pp. compared to the previous month.
“In the case of a 500,000 PLN loan with repayment spread over 30 years, such a change means that the installment decreases by almost 210 PLN per month. This is the amount that remains in the borrowers’ wallets but also the difference that has a real impact on improving creditworthiness. Such action can also be seen as a move anticipating the decision of the Monetary Policy Council to reduce interest rates. Let us remind you that the last decision on this matter took place in October last year. In Poland, mortgage interest rates are over 7%, which is the second-highest result in the entire EU. More expensive property financing is available only in Latvia, where average interest rates reach 7.8%,” calculates Konrad Pluciński.
*Rankomat.pl’s Mortgage Barometer is based on the offer of banks made available for the needs of the Ranking.pl mortgage comparison engine. These banks are: Alior Bank, Citi Handlowy, Millennium Bank, PKO BP, BNP Paribas, Credit Agricole, ING, Pekao, Santander Bank Polska, and Velo Bank. The offer of mortgage loans in these banks is checked for the four most common groups of borrowers: singles, couples without children and with one and two children. The assumed loan to value (LTV) is 20%, borrowers have permanent employment under an employment contract, do not have other financial obligations and have a positive credit history in the Credit Information Bureau (BIK). The Mortgage Barometer Index is the average of the offer of all banks for four borrower profiles.
Source: https://managerplus.pl/banki-lagodza-warunki-kredytow-hipotecznych-srednia-zdolnosc-kredytowa-wzrosla-do-488-tys-zl-36643
