2024 was another difficult year for anyone considering taking out a mortgage in Poland. The National Bank of Poland held the base rate at 5.75% which keeps mortgage rates at the high level. This make funding a residential properties more expensive than several years ago and naturally Polish housing market slowed down.
Mortgage Rates
At the time of writing 5-year fixed-rate mortgages in Poland range from 7.10% through to 7.94% depending on a size of your deposit and the bank. For variable-rate mortgages banks offer margin between 1.80% and 2.80%, so current variable rates in Poland are between 7.55% and 8.65%.
In Poland variable-rate mortgage interest rate is calculated this way:
Mortgage rate = WIBOR + bank’s margin
Bank’s margin is fixed, WIBOR is variable. So your mortgage interest rate moves automatically in line with WIBOR. At the time of writing WIBOR is 5.80% – 5.86% depending on the type of WIBOR.
The table below shows current mortgage rates from leading banks in Poland.
The above rates may not be suitable for your circumstances and might not be available when you’re ready to submit an application.
Affordability
Higher interest rates means higher monthly mortgage payments. That’s why now you need to earn more to get the same mortgage amount than several years ago, when interest rates were much lower.
Due to high inflation, the cost of living increased. Banks’ affordability calculators also takes into account increased energy bills, foods, petrol, etc.
Currently most borrowers in Poland can expect to be able to borrow up to 5.5 times their net annual income. However, there are other important factors which affect affordability including age, debt, dependants, credit score and employment status.
Interest Rates in Poland. Where are we now?
The current National Bank of Poland base rate is 5.75%.
The chart below shows how the National Bank of Poland base rate and average mortgage rates in Poland changed over time.
What next for interest rates in Poland?
Everything depends on inflation, but fortunately inflation is falling in Poland. That’s why most economists predict that interest rates will fall this year and next year. I hope the predictions turn out to be correct.
These are some of the predictions for Polish base rate this year:
- Fitch Ratings expects base rate will drop to 5.25% in 2025.
- Bank Gospodarstwa Krajowego predicts base rate will fall to 4.50% to the end of 2025.
- ING Bank expects a decrease to 5.00 % – 4.75% in 2025.
- BNP Paribas and mBank predict base rate will fall to 4.00% to the end of 2025.
- In a poll by National Bank of Poland of 23 economists, prediction for average base rate for 2025 is 5.39% and 4.29% for 2026.
- PKO Bank Polski predicts base rate will drop by 100 basis points (1%) in 2025 and 100 basis points in 2026. Thus, base rate should reach 4.75% in 2025 and 3.75% in 2026.
No Deposit Mortgages
Rodzinny Kredyt Mieszkaniowy – this is the Polish Government Scheme for First-Time Buyers. Currently this is the only mortgage scheme backed by Polish Government. You need zero deposit in this scheme. Therefore, you can borrow up to 100% of the purchase price or even more if you want additional money for renovation. Find out more about the 100% – no deposit mortgage in Poland.
If you have a deposit lower than 10% this scheme can be also suitable for you. Read more about how this program works in practice.
If you buy an apartment there is a limit of the price per square meter. The price limits are different for different cities and different areas in Poland. Bank Gospodarstwa Krajowego announces the limits for every quarter. Price limits for the first quarter of 2025 are the same like in the fourth quarter of 2024.
The price limits per square meters only concern apartments. There are no price limits per square meter if you buy or build a house.
My Thoughts
I believe inflation in Poland will fall this year and that will allow Polish central bank to decrease interest rate. It will decrease mortgage rates and improve affordability.
Polish government planned to start new mortgage program in 2024 called “0% mortgage” but they officially withdrew from that. Those who have been waiting for this program will probably decide to buy a property and take out a normal mortgage in the next months.
On the other hand some are waiting to buy a property when mortgage rates are lower. The question then is, will the lower mortgage rates entail house prices going up? This is highly possible. Timing the market is very difficult.
After the stagnant 2024, I am optimistic for 2025. If you wish to discuss Polish mortgage market and your plan for this year, I am all ears, call me on +48 661 440 714 or send me an email mariusz@mzfinanse.pl