The cost of a mortgage in Poland will depend on the type of loan you choose, your down payment, and the lender that you choose.
Generally you will be charged in two ways: upfront and over time.
Upfront costs include:
Arrangement fee
This is what you pay for the bank to set up you mortgage. An arrangement fee is usually around 2% of the loan amount but can be higher (even 5%) but currently most lenders don’t charge it at all.
Valuation fee
A bank will value the property you want to buy and make sure it’s adequate security for the loan. The cost of a valuation fee depends on a bank and the type of a property – usually it is from 400 PLN to 1000 PLN. Some banks offer mortgages with free valuations.
Life insurance / Unemployment insurance
Some banks require a life insurance or unemployment insurance from borrowers. Sometimes you need to pay for that in advance for 4-5 years. If it is required it usually costs from 2% to 5% of the loan amount.
Costs over time include:
Interest
A cost of interest depends on a bank, mortgage term, repayment methods, loan currency, etc. A typical mortgage rate in Poland is now around 7.5% (5-year fixed rate) or 8.6% (variable).
Property insurance
Banks in Poland require you to take out a property insurance but usually you are free to take out this insurance with any insurance company. A typical cost of a property insurance in Poland is around 0,1% (per year) of a property value.
Life insurance
Some banks require you to take out a life insurance and usually they want to sell you their own insurance. A typical cost of a life insurance is from 0.035% to 0.045% (per month) of mortgage balance.
If you repay the whole or part of your mortgage early during a certain period you may have to pay an Early Repayment Charge.
Let’s look at an example:
