Despite the very high number of mortgage applications submitted in March, apartment prices remained stable. There are several indications that the March mortgage boom was, to a large extent, an illusion caused by a very large number of loan refinancing applications. At the same time, lower interest rates have clearly improved housing affordability. According to a report by Rankomat.pl and Rentier.io, in Warsaw, Kraków and Katowice, the monthly mortgage instalment for a 70-square-metre apartment fell by more than PLN 1,000 compared with the first quarter of 2025. However, the risk of interest rate hikes and an increase in monthly payments of almost PLN 200 has reappeared on the horizon.
Was the March mortgage boom only an illusion?
At the beginning of April, data from BIK on the huge increase in mortgage applications were widely reported. In March, as many as 63,000 applications were submitted, the highest result in 18 years. Their number was 71% higher than a year earlier, while their total value increased by as much as 80%.
It should be noted, however, that these applications will translate into the number and value of mortgages granted in April and May. They should not be linked directly to the BIK data just published on the number and value of mortgages granted in March. That result was influenced by applications submitted in January and February, which reflects the relatively long process of approving a mortgage.
The March boom in mortgage applications appears highly unusual. Such a strong increase in demand should also be visible in sales results, changes in housing supply and apartment prices.
As far as sales results are concerned, developers reported sales around 40% higher than a year earlier. This means there is a boom in this segment of the market, although not as large as the increase in mortgage demand might suggest.
When it comes to the number of apartments listed for sale on property portals, supply in the 17 cities analysed decreased by only 9% year on year.
Moreover, strong demand for mortgages did not lead to an increase in apartment prices. In March, among the 17 cities analysed, prices fell in nine and rose in eight. The average monthly change was -0.03%, meaning that prices remained broadly in line with February levels.
So why were the market effects so moderate despite a record number of mortgage applications? It seems very likely that around half, and perhaps even the majority, of these applications concerned refinancing, meaning the replacement of an old mortgage with a higher interest rate with a new one carrying a lower rate. BIK has just reported that the share of refinancing in March was 30%. However, this reflects applications submitted back in January and February. March applications will most likely push this share even higher in April. The report estimates it at around 50%.
According to the authors, the boom was largely driven by people refinancing fixed-rate mortgages. Under current rules, they cannot switch from a fixed rate to a variable rate. A new mortgage must also have a fixed rate. For this reason, many borrowers had previously waited, because before the outbreak of the war in the Middle East, further interest rate cuts had been expected this year.
When the war broke out, forecasts changed. The risk of interest rate hikes even appeared. At that point, many borrowers made quick decisions to refinance. Demand for genuinely “new mortgages” was therefore much lower than it may seem at first glance.
Banks defend themselves against refinancing competition
It is also worth noting that refinancing activity has recently become so strong that some borrowers report that banks have started taking defensive measures. When a client applies for a certificate confirming their outstanding debt, which is needed to obtain a refinancing loan, some banks offer to reduce the interest rate. This also applies to fixed-rate loans.
Usually, such a reduction does not result in an interest rate as low as that available through a refinancing loan. On the other hand, staying with the current bank makes it possible to avoid the somewhat burdensome procedures involved in taking out a refinancing mortgage.
At present, it may therefore be a good idea to apply for such a certificate even if a borrower is not planning to refinance. The bank may respond by offering better terms. Still, it is best to compare the offer from the current bank with what can be obtained from competitors through refinancing.
Large apartments became 3.4% more expensive year on year
As regards apartment prices, the report focuses not on the detailed March data, but on the entire first quarter. These figures provide a unique opportunity to look at prices in individual market segments.
The most dynamic situation can be seen in the segment of large apartments, meaning those with an area of more than 60 square metres. In the first quarter of 2026, prices in this category were higher than a year earlier in 15 out of the 17 cities analysed. The average price change across the analysed cities was 3.4% year on year.
By comparison, the average increase for small apartments of less than 35 square metres was 1.8% year on year, while for medium-sized apartments of between 35 and 60 square metres it was 0.9% year on year.
Lower instalments improved housing affordability
The vast majority of people buying apartments for their own use finance the purchase with a mortgage. Mortgages became cheaper again in the first quarter thanks to the interest rate cut in March. In total, interest rates have fallen by 2 percentage points over the past 12 months. As a result, despite the modest price increases mentioned above, buying an apartment is now much easier than a year ago. Monthly mortgage payments are significantly lower, especially in the case of large apartments.
Instalments down by more than PLN 1,000 in Warsaw, Kraków and Katowice
For a 70-square-metre apartment, the monthly instalment fell by more than PLN 1,000 in three cities. In Warsaw, the instalment for such an apartment is now PLN 6,338, which is PLN 1,328 less than in the first quarter of 2025. In Kraków, it stands at PLN 5,595, down by PLN 1,064.
Katowice is a somewhat surprising member of this group, as prices there are not as high as in Warsaw or Kraków. Unlike in those two cities, Katowice has seen not only a decline in interest rates, but also lower prices for large apartments than a year earlier. The combination of these two factors produced such a significant fall in the monthly instalment.
At the other end of the spectrum is Gdańsk, where the situation is the opposite of that in Katowice. The instalment for a 70-square-metre apartment in Gdańsk fell by only PLN 324 over the past 12 months. This happened because most of the benefit from lower mortgage rates was absorbed by an increase in prices of large apartments. In the first quarter of 2026, prices of large apartments in Gdańsk were as much as 15% higher than a year earlier.
Monthly payments may rise by almost PLN 200
Unfortunately, there is a risk that housing affordability could deteriorate again. In recent days, futures market quotations have suggested the risk of an interest rate hike. At the beginning of March, the WIBOR 6M rate stood at 3.7%, while it is now 3.9%. Futures quotations suggest that in six months it could reach 4.31%.
If such an increase actually occurs, the monthly payment on a PLN 500,000 mortgage taken out for 30 years would rise by PLN 196, from PLN 2,902 to PLN 3,098.
Buyers may still have room to negotiate
Looking ahead, the most likely scenario still appears to be price stabilisation. This is especially the case because several factors on the horizon may help maintain significant supply and strengthen buyers’ negotiating position.
“From 20 May 2026, the EU regulation on the collection and sharing of data on short-term rentals will start to apply. In the coming quarters, this may increase the formalisation of this segment and influence selling decisions among owners of apartments in tourist cities. In addition, greater data transparency and a more cautious approach among buyers may increase pressure for realistic valuations in locations where fundamentals are weaker. In this situation, a continued sideways price trend with local shifts appears more likely than one uniform movement across the entire market,” said Anton Bubiel, CEO of Rentier.io.
Higher property values increase the risk of insufficient insurance cover
Changes in apartment prices matter not only for people planning to buy property with a mortgage, but also for those who are already repaying a loan and have home insurance. It is worth remembering that the insured amount set several years ago may no longer reflect the real value of the property. This increases the risk of underinsurance, meaning that compensation after damage may turn out to be insufficient.
“In many cities, apartment prices have increased by more than 50% over the past five years, so it is worth verifying the insured amount when renewing a policy. If it has not been updated for a long time, it may no longer correspond to the current value of the property, which means the risk of receiving compensation that is too low in the event of damage,” said Izabela Stachura-Adamczyk, expert at Rankomat.pl.
