We have prepared a series of recordings for you.
We want you to come to the meeting with an outline in your head of the area we are going to cover. You will find on our platform videos that address the most important, fundamental issues of taking out a mortgage. Some of them relate more to you when it comes to, for example, the issue of creditworthiness itself, some of them develop other threads, less universal, but they should also be exhausted at the very beginning. We want you to have a certain foundation when coming to the meeting so that it is as productive as possible for you – we respect your time. We invite you to watch and possibly ask questions already at the meeting.
Down Payment Segments
- 10% down payment – having a 10% down payment opens up mortgage opportunities but often comes with stricter conditions and higher costs. Many banks are cautious about lending with a lower down payment due to increased risk. To mitigate this risk, banks may require:
- Low down payment insurance – this can be a separate policy paid upfront or incorporated into the loan margin, which increases the overall cost until the equity reaches 20%.
- Higher margins – banks may offer higher interest rates to compensate for the higher risk associated with lower down payments.
- Limited bank options – not all banks will accept a 10% down payment. Approximately half of the banks in Poland might approve such loans, often with additional conditions.
- 20% down payment and higher – a down payment of 20% or more is considered standard and minimizes the perceived risk for the bank. This generally results in:
- Better loan offers – with a 20% down payment, you are likely to receive better interest rates and terms.
- Compliance with KNF recommendations – the Polish Financial Supervision Authority (KNF) recommends a 20% down payment, making it easier to meet bank criteria.
- Flexibility – higher down payments beyond 20% do not significantly change the loan terms but improve your equity and reduce the loan amount needed.
Loan-to-Value Ratio (LTV)
LTV is a critical factor in mortgage lending. It represents the ratio of the loan amount to the appraised value of the property:
- Example calculation – if the property value is PLN 1,000,000 and you have a 20% down payment, you can borrow up to PLN 800,000, resulting in an LTV of 80%. For a 10% down payment, you can borrow up to PLN 900,000, resulting in an LTV of 90%.
- Impact on loan approval – lower LTV ratios (higher down payments) are preferable as they reduce the bank’s risk. Higher LTV ratios (lower down payments) may require additional measures like insurance.
Refinancing and LTV Adjustments
Changes in property value and loan repayments can adjust your LTV ratio:
Repayments and overpayments – making regular repayments or additional overpayments reduces the loan amount, thereby decreasing the LTV ratio. For example, paying down the principal amount can shift your LTV from 90% to 80%.
Increasing property value – if the property value increases over time, your LTV ratio decreases, improving your loan conditions. For instance, if the property value rises due to market conditions, the increased equity can lower your LTV ratio.
Why you should consult your situation with our experts?
Every financial situation is unique, which is why an individual approach to choosing a mortgage loan is so important. Our assumptions are only a simulation, and your conditions may differ. That’s why we encourage you to contact our experts who will:
- Analyze your individual financial situation
- Find the best loan offers available on the market
- Help negotiate with the bank
- Provide support at every stage of the loan process
By working with us, you can be sure that the selected mortgage loan will be perfectly tailored to your financial situation and future plans.
Contact Us
Consult your situation with our Experts. Take advantage of our knowledge and 16 years of experience to make the best financial decision. Remember, working with us is completely free of charge!
Call us on +48 12 352 12 12 or fill out the contact form on contact page to schedule a free consultation. We are here to help you!