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- Magazine
- eISSN
- 2084-1264
- Première parution
- 09 Apr 2014
- Périodicité
- 2 fois par an
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- Anglais
The year 2020 was an extraordinary year for the world economy. The coronavirus pandemic (COVID-19) has had (and continues to have) a huge impact on the market, both in general and across categories. The situation seems to be threatening because it is more difficult than usual to predict its further development. It is worth noting that the crisis caused by the coronavirus pandemic, which the global economy is currently struggling with, is also extremely interesting. This is due to the fact that the problems affect both the demand and supply sides of the economy. Huge changes are noticeable, among others, in the labour market, capital market or the market of goods and services, which has further impact on the activity of business entities. In 2020, very much attention was paid to the situation on the real estate market. In recent years we have observed a steady upward trend. Today, experts, developers, investors and households deliberate about changes in real estate prices and the terms of financing the purchase of real estate based on external funds. The issue of financing the purchase of residential real estate seems to be particularly important as it concerns the widest group of buyers. To have Report: M. Kazimierski, Biuro Informacji Kredytowej (Credit Reporting Service), website:
The purpose of this article is to analyse the changes related to financing the purchase of residential real estate through a mortgage in Poland that were a result of the coronavirus pandemic in its initial stage, that is, the period from March to September 2020. The research problem is the impact of the pandemic on the process of granting and repaying loans for housing purposes. The research hypothesis assumes the negative consequences of the COVID-19 pandemic for the housing loan market in the analysed period. The research methods used are the analysis of statistical data and facts R. Milewski (ed.),
The primary social function of housing is to meet the basic human needs, such as security. Lechowicz emphasises that “Housing is a field of socio-economic life, financed by social and private entities, banks, pension funds, insurance companies and others” T. Lechowicz, G. Główka,
Loans secured by a mortgage belong to the group of long-term loans E. Kucharska-Stasiak, Biuro Informacji Kredytowej (Credit Reporting Service), website: ibid. [accessed: 05.10.2020.].
There are many criteria for the division of mortgage loans. Główka lists the most important as follows G. Główka (ed.), type of loan currency, interest rate, method of repayment and type of real estate market that is being financed.
Taking into account the criterion of the type of currency, in Poland, there are loans in PLN, foreign currency loans and loans denominated in a foreign currency exchange rate ibid., pp. 46–47.
Loans are divided according to the interest rate into those with fixed and variable interest rates. In the case of mortgage loans, in Q4 2019, fixed interest rates were offered only in three banks. It is worth noting that M. Kazimierski,
Another criterion is the method of repayment of the loan, which distinguishes the possibility of repaying the loan in fixed and diminishing instalments E. Kucharska-Stasiak,
The last division – according to the type of real estate market being the subject of crediting – divides banking products into three types. These are construction and mortgage loans, mortgage loans and second mortgages. The first loan is granted for the purpose of carrying out a construction investment. It consists of two phases: the first construction phase, a much shorter one, which usually ends with notice of construction completion, and then a longer mortgage phase. Mortgage loan is usually used for the purchase, finishing or renovation of a real estate. The third of these banking products is a second mortgage G. Główka (ed.), J. Leja,
A borrower applying for a mortgage credit must face the complex conditions of granting it Biuro Informacji Kredytowej (Credit Reporting Service), website: Komisja Nadzoru Finansowego (Polish Financial Supervision Authority), website:
In the bank's operations, especially in times of crisis, it is important to assess the creditworthiness of a potential borrower. According to Art. 70 sec. 1. second sentence of the Banking Law Ustawa z dnia 29 sierpnia 1997 r. - Prawo bankowe, Dz. U. 1997 Nr 140 poz. 939, art. 70 ust. 1. [Act of August 29th 1997 – Banking law, Journal of Law 1997, no. 140 item 939, art. 70 point 1.]
The borrower is obliged to return to the bank the total amount of the mortgage credit granted and the sum of the total cost of the credit. Before deciding to enter into a loan agreement with a bank that offers a mortgage, one should be aware of what the cost of the mortgage consists of. According to Art. 4. item 5. of the Mortgage Act and the supervision over mortgage brokers and agents, the total cost of the mortgage is Ustawa z dnia 23 marca 2017 r. o kredycie hipotecznym oraz o nadzorze nad pośrednikami kredytu hipotecznego i agentami, Dz.U. 2017 poz. 819, art. 4. pkt. 5. [Act of March 23rd 2017 on mortgage loan and on supervision over mortgage brokers and agents, Journal of Law 2017, item 819, art. 4, item 5.]. interest, fees, commissions, taxes and margins, if known to the lender, costs of additional services, in particular insurance, when incurring them is necessary to obtain a mortgage credit or to obtain it on the offered terms and conditions – with the exception of notary fees and court fees borne by the consumer.”
Lending activity is the main source of income for many banks, but at the same time carries a high risk of borrowers’ insolvency. The high risk is associated with a meticulous assessment of the ability to repay the contracted liability and high capital requirements towards customers (own contribution) M. Nowakowski, Rekomendacja S – dotycząca dobrych praktyk w zakresie zarządzania ekspozycjami kredytowymi zabezpieczonymi hipotecznie [Recommendation S – concerning good practices in the management of mortgage-secured loan exposures], KNF, Warszawa 2013, p. 9. ibid., Rekomendacja S, pp. 31–32. 80% or 90% “if a part of the exposure that exceeds 80% LtV is properly insured, or the borrower has provided additional security in the form of funds blocked in a bank account or by a collateral on National Treasury or NBP (National Bank of Poland) debt securities denominated in PLN.”
In uncertain economic conditions, when the risk of banks’ lending activity increases, the costs of the credit change and the terms of granting it (e.g. regarding the minimum own contribution) may be further triggered.
The situation on the residential real estate market in the second and third quarters of 2020 was assessed by housing construction, the results of the real estate development sector, demand, average transaction prices of flats and the housing availability index (Indeks Dostępności Mieszkaniowej [IDM]) M3.
In the period from April to June 2020 – compared to the corresponding period in 2019 – there was an increase in dwellings commissioned only by 0.70%, while the number of started construction projects and issued building permits decreased (by 23% and 13%, respectively). The data of the Central Statistical Office (Główny Urząd Statystyczny [GUS]) show a 24% increase in the number of flats completed in Q3 2020 compared to the previous quarter. The number of building permits issued (10.5%) and the number of started construction projects (42%) also increased. Compared to the third quarter of 2019, the increases are not so significant, and in the case of the number of building permits issued, a decrease of 6.87% was recorded. After the pessimistic results of the development sector in the second quarter, there was a quick rebound in the third quarter. A quarterly record for the number of newly built apartments was set, while in September 2020, the highest monthly number – 17,007 – of newly built apartments in the history of the Polish development market was achieved. These records indicate a very optimistic forecast for the development of the housing market among developers despite the uncertain epidemiological and economic situation AMRON-SARFiN Report, AMRON-SARFiN Report,
The GUS has not yet published data on the number of transactions concluded for the purchase of real estate in 2020. The author used other sources that may help in determining the demand for apartments for sale. Figure 1 shows the rate of „apartments for sale” queries directed to the Google search engine from the beginning of the year to 30 September 2020. A sharp drop in the number of queries is visible in March, when the first cases of virus infection were confirmed and the first restrictions were introduced. In the following months, interest in buying a flat grew steadily.
Figure 1
Indicator of “apartments for sale” queries directed to the Google search engine
Source: Google Trends, website:
Figure 2 shows the demand for flats in the primary market and also indicates a decline in demand in the second quarter of 2020 and a lower demand in the next two quarters. The number of flats launched for sale in the second quarter was much lower than in the first quarter, and still significantly exceeded the demand, which has not happened recently. The decline in demand is also visible in the greater number of offers remaining for sale at the end of the quarter.
Figure 2
Quarterly relation of demand to supply – primary market
Source: JLL report,
There is no doubt that the impact of the pandemic on the housing market is complex, and therefore, prices on both the primary and secondary markets have moved in different directions. In the second quarter, the asking prices of newly introduced apartments for sale on the primary market (RPO) continued to rise, while developers limited their supply, hoping to maintain the market price. Transaction prices on the primary market (RPT) began to fall, among others in Warsaw. Interestingly, transaction prices of flats on the secondary market (RWT) grew in all groups of cities, although the growth rate slowed down Report:
Dynamics q / q m2 prices of apartments in the analysed cities in Q2 2020
| Gdańsk | −1.0% | −0.1% | −2.2% | 2.4% |
| Gdynia | 2.1% | −3.4% | −0.2% | 0.5% |
| Kraków | 5.7% | 4.3% | 1.6% | 3.8% |
| Łódź | −1.5% | −2.7% | −0.6% | 4.7% |
| Poznań | 2.9% | 0.2% | 0.2% | 3.3% |
| Wrocław | 2.0% | −3.8% | −1.6% | 2.5% |
Source: Report:
The situation in the third quarter was as follows: the asking prices of newly introduced flats on the primary market (RPO) slowed down their growth, with a simultaneous increase in supply. Transaction prices in the primary market (RPT) grew in all groups of cities. In the secondary market, stabilisation of offer prices (RWO) and an increase in transaction prices were recorded (RWT) Report:
Dynamics q / q m2 prices of apartments in the analysed cities in Q3 2020
| Gdańsk | −1.7% | −3.3% | −0.7% | 4.4% |
| Gdynia | 1.4% | 3.3% | 1.4% | 2.7% |
| Kraków | −2.8% | 2.0% | −1.3% | 0.5% |
| Łódź | 3.4% | 5.4% | 0.6% | 7.0% |
| Poznań | 2.0% | 0.3% | 0.4% | 2.4% |
| Wrocław | 0.2% | 0.9% | 3.5% | −2.6% |
Source: Report:
Demand dropped sharply, but it had little impact on the prices, thanks to lower supply by the developers.
In the cyclical AMRON-SARFiN report, we find a synthetic measure of housing availability in Poland – the Housing Accessibility Index. It shows the quarterly changes in the availability of housing for a sample family consisting of two working people and an older child. While in Q2 there was a noticeable slight increase in the index (compared to Q1 from 202.28 to 202.75), already in Q3, a (minimal) decrease in the availability of flats (compared to Q2) to the level of 202.27 was recorded. The reasons can be as follows:
a slight increase in transaction prices in the segment of residential premises with a usable area of 45 m2 to 55 m2; drop in interest rates on new housing loans; an increase in the average gross family income by almost 3% compared to the previous quarter and a slight decrease in the level of the cost of living AMRON-SARFiN report,
Before the pandemic, the banking sector was assessed as stable and in good condition. Here are just some of the factors that indicated it Report: the growth rate of loans to the non-financial sector close to the GDP growth rate; in 2015–2019, the share of housing loans with LtV above 80% decreased systematically (from approx. 52% to 24%) and the burden on borrowers with repayment of loan instalments did not increase due to the simultaneous increase in wages.
However, the risk related to lending had to be carefully monitored due to, for example, the growing value of newly concluded housing loans and the growing share of large-value consumer loans in new loans.
The report on the stability of the financial system in Poland (from June 2020) contains some predictions about the impact of COVID-19 pandemic on the banking sector. Household lending is expected to slow down. In the case of housing loans, banks may be threatened by rising unemployment, especially among the self-employed, as this group may be more affected by the effects of the pandemic. The report also draws attention to the possible lower growth of deposits from the non-financial sector amidst the strong economic slowdown and rising unemployment, accelerating the pace of deterioration in the quality of loan portfolios and the cessation of servicing loan instalments. One of the positive factors influencing the liquidity position of banks may be the reduction of the required reserve rate by the Monetary Policy Council, which increases the funds at the banks’ disposal and improves liquidity ratios ibid., pp. 41–50.
In order to assess the situation on the credit market in Poland, the author used a report published by the Financial Stability Department of the NBP, addressed to the chairmen of credit committees, the purpose of which is to determine changes in lending policy and changes in demand for credit. The research was conducted at the beginning of July 2020, among 24 banks, and for the second quarter of 2020. In the given quarter, most banks tightened the requirements for granting housing loans, including two-thirds of respondents significantly. The credit spreads and spreads for higher-risk loans were raised, as well as the requirements for collateral and the borrower's own participation in the investment. The requirements for determining creditworthiness have been raised and the maximum amounts of credit that can be obtained have been reduced Report: Sytuacja na rynku kredytowym - wyniki ankiety do przewodniczących komitetów kredytowych, III kwartał 2020 r. [Situation on the credit market - results of the survey to chairmen of credit committees, Q3 2020], Departament Stabilności Finansowej [Financial Stability Department], Warszawa, pp. 2–9.
In the opinion of the banks, the changes in lending policy were mainly influenced by the deteriorating forecasts for the country's economic situation (−92%) and the housing market (−67%). Other factors were also pointed out: the deterioration in the quality of the housing loan portfolio, the NBP's monetary policy decisions, or the increased risk of the spread of the pandemic. The chairmen of the committees emphasised that the process of economic defrosting influenced the easing of lending policy (Figure 3).
Figure 3
Reasons for changes in lending policy – home loans
Source: Report: Sytuacja na rynku kredytowym - wyniki ankiety do przewodniczących komitetów kredytowych, III kwartał 2020 r. [Situation on the credit market – results of the survey to chairmen of credit committees, Q3 2020], Departament Stabilności Finansowej [Financial Stability Department], p. 8.
The respondents also commented on the reasons for the changes in demand for mortgage loans. The main reasons for the decline in demand in the given period were deterioration of the economic situation of households (−80%), the tightening of the standards of granting loans (83%), as well as the forecasts for the housing market, reductions in household consumption expenditure and the uncertainty resulting from the ongoing COVID-19 pandemic.
Analysing the above data, it can be concluded that the residential real estate market has not been affected by the serious effects of the COVID-19 pandemic so far. In the initial stage of the pandemic, the demand for housing has fallen, but is rapidly starting to rise again The decline in demand may be related to the economic situation of households, which feel insecure during the pandemic and postpone the decision to buy real estate, or the restrictions on access to institutions that issue documents necessary for real estate purchases. On the other hand, construction has not slowed down and property prices have moved slightly. The housing availability index has also remained stable. There are no worrying data on the banking sector, although the forecasts highlight the negative effects that may arise from the further deteriorating economic situation. In the first half of 2020, the chairmen of banking committees see deteriorating economic situation in the country as the primary reason for changes in the lending policy.
The beginning of 2020 did not herald negative changes on the financial market. The bankers forecasted an increase in lending activity. The good situation on the real estate market showed an increase in interest on the part of mortgage borrowers. Unfortunately, the COVID-19 pandemic and the accompanying economic lockdown have significantly changed the expectations of banks and their customers.
The changes were rapid and concerned a large part of the economy, which resulted in a change in the up to now growing trend of the average weekly number of inquiries sent to BIK on the process of housing loans Biuro Informacji Kredytowej (Credit Reporting Service), website: Biuro Informacji Kredytowej (Credit Reporting Service), website:
Figure 4
BIK index – the demand for housing loans
Source: BIK (Credit Reporting Service),
An economic downturn often results in measures taken by relevant institutions to protect borrowers who are in a difficult financial situation and are unable to meet the originally agreed terms of repayment of their loan obligations. Researchers indicate that borrower protection can increase the demand for credit and can be beneficial to those who are having difficulty meeting their obligations. However, it should be remembered that this protection also reduces the supply of loans, which in turn leads to an increase in loan costs and its lower availability P. Montebruno, O. Silva, N. Szumilo,
The interest rates, the level of which is set by the Monetary Policy Council (Rada Polityki Pieniężnej [RPP]), have an impact on the cost of a mortgage. Since the beginning of 2020, the interest rates have been reduced three times, by a total of 1.4 pp in the case of the prime reference rate. The NBP reference rate is currently 0.1%. This is the lowest level ever NBP (National Bank of Poland), website: Kisiel M., Website:
In response to the reduction of interest rates in Poland and the increase in risk related to lending, banking institutions increased their loan spreads. The AMRON-SARFiN report, based on bank offers, presents the average mortgage loan margin from April 2019 to June 2020, assuming a loan of PLN 300,000, granted for 25 years, where the LtV level was 75% (Figure 5). At the end of June, the average margin was 2.25%, that is, by 0.13 pp, compared to February 2020 (the last month before the pandemic). Comparing the corresponding month in 2019, the increase in the average margin, with the above assumptions, amounted to 0.22 pp AMRON-SARFiN Report, Marszałek D.,
Figure 5
Average mortgage loan margin (%)
Source: AMRON-SARFiN report,
In order to capture changes in the amount and structure of total loan costs, the author compared the mortgage loan offers that were available to Citi Handlowy bank customers in February, April and September of 2020. The conclusions were based on the simulations of mortgage loan offers prepared and published by Sebastian Bilski, an expert in the field of finance, and Marcin Iwuć, an economist and experienced publicist in the field of capital markets and personal finance Website: Website: loan amount: PLN 300,000, collateral value: PLN 375,000, own contribution: 20%, loan term: 30 years, type of instalments: equal, currency: PLN and profile of borrowers: a joint loan – two people living in a large city in Poland.
The list below (Table 3.) shows that the Citi Handlowy bank increased the margins in the September offer, but the actual loan interest, on comparing the months February and September, dropped by 1.34 pp, which resulted in a reduction of the total cost of the loan by as much as 73.5 thousand PLN
Comparison of mortgage loans offers
| Simulation name | Citi Handlowy Housing Loan for the Priority segment Margin 1.74 | Citi Handlowy Housing Loan for the Priority segment Margin 1.74 | Citi Handlowy Housing Loan for the Priority segment Margin 1.89 |
| Monthly costs (from the second month) | 1357 PLN | 1268 PLN | 1153 PLN |
| Total cost of the loan | 192.198 PLN | 160.137 PLN | 118.704 PLN |
| Real interest | 3.8% | 3.23% | 2.46% |
| Bank margin | 1.74% | 1.74% | 1.89% |
| Reference rate | 1.71% | 1.17% | 0.28% |
Source: Author's own analysis based on
When talking about changes in financing of the purchase of residential real estate, it is also worth paying attention to the issues presented below.
The Polish Financial Supervision Authority (KNF) has not issued new recommendations on the amount of own contribution that Polish banks and Credit and Savings Unions should require from their customers applying for mortgage loans. However, lending institutions have independently decided to increase these requirements in order to reduce the credit risk. Table 4 presents the amount of own contribution applicable in selected banks before the COVID-19 pandemic and in June and September. It should be remembered that when taking a loan with own contribution lower than 20%, additional security is required, for example, purchase of an additional low own contribution insurance
Own contribution in February, June and September
| Alior Bank | 10% | 10% | 10% |
| BNP Paribas | 20% | 20% | 20% |
| BOŚ Bank | 20% | 30% | |
| Credit Agricole | 10% | 10% | 10% |
| ING Bank Śląski | 20% | ||
| mBank | 10% | ||
| Bank Millennium | 10% | 10% | 10% |
| Pekao Bank Hipoteczny | 10% | 20% | |
| Pekao SA | 10% | 15% | |
| PKO BP | 10% | 20% | |
| Bank Pocztowy | 20% | 20% | 20% |
| Santander | 10% | 10% (bank customers)/20% (external) | |
Source: Author's own analysis based on: Serafin A.,
Due to the coronavirus pandemic and its consequences, 7/12 banks presented in the list decided to introduce changes (tightening) in the thresholds of own contribution in 2020. At the beginning of the year, BOŚ Bank allowed collateral in the amount of 20%, and now it requires 30%. The situation was similar at ING Bank Śląski, but in mid-September, the bank decided to reduce own contribution to the amount from before the pandemic, that is, 20%. Own contribution at mBank in September again returned to a low level of 10% Serafin A., Marszałek D.,
In its publication, AMRON presents quarterly data on the structure of the LtV ratio for newly granted housing loans (Table 5).
The structure of the LtV ratio for newly granted loans
| 14.63% | 14.94% | 15.67% | 16.51% | 15.11% | |
| 6.16% | 6.25% | 6.05% | 5.95% | 7.37% | |
| 36.93% | 35.93% | 36.25% | 36.47% | 38.91% | |
| 43.09% | 42.88% | 42.03% | 41.07% | 38.61% |
Source: AMRON-SARFiN report,
The percentage of loans with the LtV ratio from 80% has been systematically declining, but in Q2 2020, compared to the previous quarter, this decrease was the highest (by 2.46 pp) and amounted to 38.61%. This is largely due to the tightening of the minimum own contribution requirements by several large banks AMRON-SARFiN report,
The SARS-CoV-2 coronavirus pandemic has shaken the financial liquidity of some groups of borrowers. The closure of the economy had its immediate repercussions. Poles lost their livelihoods. Employees sensitive to the restrictions introduced in industries were dismissed or took unpaid leaves. In addition, investors who rented flats for students were losing tenants, and restaurateurs, hairdressers, hoteliers and gym owners recorded losses, unable to run their businesses normally. Due to this situation, many of them do not have sufficient funds to pay their loan instalments in accordance with the agreed repayment schedule.
On 2 April 2020, the European Banking Authority published the “Guidelines on statutory and non-statutory loan repayment moratoria to address the COVID-19 crisis” The website of the Rzecznik Finansowy [Financial Ombudsman], website:
On 16 March 2020, the Polish Banking Association (Związek Banków Polskich [ZBP]) issued a statement on the assistance measures taken by banks in connection with the COVID-19 coronavirus pandemic. The support plan assumes, among others, the possibility of a 3-month deferment of principal and interest instalments or principal instalments in case of housing loans, that is, repayment holidays (non-statutory). Banks declare that the applications of those customers who justify the need to suspend loan repayments with their financial situation caused by the COVID-19 pandemic will be processed at a rapid pace and without additional fees being collected Związek Banków Polskich (Polish Banking Association), website: Report: Raport o stabilności systemu finansowego. Wydanie specjalne: skutki pandemii COVID-19 [Financial Stability Report. Special issue: the effects of the COVID-19 pandemic], opt. cit., p. 44. Bocheński K., Biuro Informacji Kredytowej (Credit Reporting Service), website:
The data reported to BIK, that is, as of 25 May 2020, shows that individual customers obtained deferred instalments due to PLN 137,000 of housing loans, which is 19% of all deferred loan instalments (i.e. loans and advances granted to individual clients and micro-entrepreneurs). In turn, housing loans in terms of value constitute 67% of all deferred loans Biuro Informacji Kredytowej (Credit Reporting Service), website:
Later, from June 2020, it was possible to suspend the performance of the loan agreement as part of the anti-crisis shield 4.0 (tarcza antykryzysowa 4.0). These are the so-called “Statutory credit holidays.” This solution gives consumers the right to suspend the repayment of one loan for a maximum period of 3 months, without charging interest or other fees. It can be used by a person who has lost their job or other main source of income as a result of the pandemic Ustawa z dnia 19 czerwca 2020 r. o dopłatach do oprocentowania kredytów bankowych udzielanych przedsiębiorcom dotkniętym skutkami COVID-19 oraz o uproszczonym postępowaniu o zatwierdzenie układu w związku z wystąpieniem COVID-19, Dz.U. 2020 poz. 1086, art. 31fa–31fc. [Act of June 19th 2020 on interest subsidies for bank loans granted to entrepreneurs affected by the effects of COVID-19 and on simplified proceedings for approval of an arrangement in connection with the occurrence of COVID-19, Journal of Laws 2020, item 1086, art. 31FA–31fc.].
Another thing that is worth paying attention to when applying for a mortgage in times of the pandemic is the income acceptance criteria for potential borrowers. These criteria have been clearly tightened. People employed under an employment contract for an indefinite term have the best chance of getting a mortgage. The base of remuneration is entirely acceptable; however, variable remuneration – bonuses, commissions, overtime – may not be allowed to determine the income. In May, persons employed for a specified period of time had real chances of obtaining financing in two to three banks. The number of banks which allowed to obtain income from mandate contracts and contracts for specific task was similar. In addition, these people had to earn income for at least 12 months, preferably from a regular contractor who makes monthly payments of remuneration to a bank account. It is most difficult for sole proprietors to obtain a mortgage Krzyżaniak B.,
In times of pandemic reality, banks are very scrupulous in analysing the creditworthiness of their clients. This has an impact on the length of the examination of loan applications, especially for mortgage loans. The standard time for issuing a credit decision is from 2 to 6 weeks. In mid-2020, future borrowers waited for approx. 3–4 months from the moment of submitting the first loan application to finalise their mortgage loan. Customers signing preliminary real estate purchase agreements must set the dates of the final agreement, taking into account the longer waiting time for the bank's decision on granting the loan Marszałek D., Website:
Polish banks have introduced new procedures allowing for remote customer service. They made it possible to deal with many matters related to applying for a mortgage online. ING Bank Śląski provides, among others, the ability to fill in an electronic form regarding the selected loan offer and submit an online mortgage application Marszałek D., Website:
To sum up the above issues, it can be said that since March 2020, a mortgage loan has been granted with safety restrictions that previously were not an obstacle for many people who wanted to receive financing for the purchase (construction) of an apartment or house, and lowering the interest rates at the present time reduces the amount of monthly loan instalment.
The outbreak of the coronavirus pandemic has triggered major changes in the mortgage market. While the housing market has not deteriorated significantly in most respects, negative effects could be noticed in the first months of the pandemic. Banks in the first half of 2020 were granting loans more conservatively, paying attention to the possible deterioration of the financial situation of their borrowers due to the worsening economic situation of the country. In pre-pandemic conditions, a person who would successfully apply for a mortgage might not be able to incur a loan obligation in the initial stage of a pandemic, for example, due to increasing the minimum required own contribution or working in an industry that is adversely affected by the pandemic Marszałek D.,
The research hypothesis pointed to the negative consequences of the COVID-19 pandemic for the borrowers of the housing loan market in the analysed period. In order to fully verify the hypothesis, the author has compiled the positive and negative effects collected in the article in Table 6.
Summary of negative and positive effects of the COVID-19 pandemic for borrowers
| Limiting consumer spending of households | Uncertainty – difficulties in forecasting | |
| Stable prices of residential real store | Fall in supply of housing | |
| Stable level of the Housing Accessibility Index | Deterioration in the economic situation of households | |
| Decline in demand for housing (less competition, grater negotiation opportunities on the market) | Tightening the criteria for granting loans by banks (including in terms of own contribution, margin, maximum possible loan amount, exclusion from financing of industries particularly exposed to insolvency) | |
| Easing the lending policy (drop in interest rates, statutory and non-statutory credit holidays) | Extended waiting time for the funding decision | |
| Lowering total credit costs for new loans | There are no uniform credit moratoria standards for all banks | |
| Improving remote customer service |
Source: own work.
Although it might seem that current and potential home loan holders may benefit from the effects of the COVID-19 pandemic, which also positively affects the mortgage market, the author is not able to clearly reject the hypothesis of the negative effects of the pandemic for borrowers in the period from March until September 2020. The strength of the presented positive and negative effects is not fully comparable. The aim of the study was achieved, but the analysis concerned a short and difficult period. The work is an introduction to further research in which it will be possible to assess the situation on the mortgage market from a longer perspective.
Figure 1
Figure 2
Figure 3
Figure 4
Figure 5
Summary of negative and positive effects of the COVID-19 pandemic for borrowers
| Limiting consumer spending of households | Uncertainty – difficulties in forecasting | |
| Stable prices of residential real store | Fall in supply of housing | |
| Stable level of the Housing Accessibility Index | Deterioration in the economic situation of households | |
| Decline in demand for housing (less competition, grater negotiation opportunities on the market) | Tightening the criteria for granting loans by banks (including in terms of own contribution, margin, maximum possible loan amount, exclusion from financing of industries particularly exposed to insolvency) | |
| Easing the lending policy (drop in interest rates, statutory and non-statutory credit holidays) | Extended waiting time for the funding decision | |
| Lowering total credit costs for new loans | There are no uniform credit moratoria standards for all banks | |
| Improving remote customer service |
Dynamics q / q m2 prices of apartments in the analysed cities in Q3 2020
| Gdańsk | −1.7% | −3.3% | −0.7% | 4.4% |
| Gdynia | 1.4% | 3.3% | 1.4% | 2.7% |
| Kraków | −2.8% | 2.0% | −1.3% | 0.5% |
| Łódź | 3.4% | 5.4% | 0.6% | 7.0% |
| Poznań | 2.0% | 0.3% | 0.4% | 2.4% |
| Wrocław | 0.2% | 0.9% | 3.5% | −2.6% |
The structure of the LtV ratio for newly granted loans
| 14.63% | 14.94% | 15.67% | 16.51% | 15.11% | |
| 6.16% | 6.25% | 6.05% | 5.95% | 7.37% | |
| 36.93% | 35.93% | 36.25% | 36.47% | 38.91% | |
| 43.09% | 42.88% | 42.03% | 41.07% | 38.61% |
Comparison of mortgage loans offers
| Simulation name | Citi Handlowy Housing Loan for the Priority segment Margin 1.74 | Citi Handlowy Housing Loan for the Priority segment Margin 1.74 | Citi Handlowy Housing Loan for the Priority segment Margin 1.89 |
| Monthly costs (from the second month) | 1357 PLN | 1268 PLN | 1153 PLN |
| Total cost of the loan | 192.198 PLN | 160.137 PLN | 118.704 PLN |
| Real interest | 3.8% | 3.23% | 2.46% |
| Bank margin | 1.74% | 1.74% | 1.89% |
| Reference rate | 1.71% | 1.17% | 0.28% |
Own contribution in February, June and September
| Alior Bank | 10% | 10% | 10% |
| BNP Paribas | 20% | 20% | 20% |
| BOŚ Bank | 20% | 30% | |
| Credit Agricole | 10% | 10% | 10% |
| ING Bank Śląski | 20% | ||
| mBank | 10% | ||
| Bank Millennium | 10% | 10% | 10% |
| Pekao Bank Hipoteczny | 10% | 20% | |
| Pekao SA | 10% | 15% | |
| PKO BP | 10% | 20% | |
| Bank Pocztowy | 20% | 20% | 20% |
| Santander | 10% | 10% (bank customers)/20% (external) | |
Dynamics q / q m2 prices of apartments in the analysed cities in Q2 2020
| Gdańsk | −1.0% | −0.1% | −2.2% | 2.4% |
| Gdynia | 2.1% | −3.4% | −0.2% | 0.5% |
| Kraków | 5.7% | 4.3% | 1.6% | 3.8% |
| Łódź | −1.5% | −2.7% | −0.6% | 4.7% |
| Poznań | 2.9% | 0.2% | 0.2% | 3.3% |
| Wrocław | 2.0% | −3.8% | −1.6% | 2.5% |
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