The suspension of loan installments for Polish house and apartment buyers will burden the banking sector with 320 billion zlotys (4.24 billion euros), according to government estimates. Nevertheless, there is no need to feel sorry for the banks, said Prime Minister Mateusz Morawiecki in Warsaw on Tuesday. “They are very profitable.”
How interest rate holidays work
Due to sharply increased interest rates, owners of loan-financed houses and apartments in Poland are allowed to suspend monthly installment payments eight times until the end of 2023. Borrowers stormed the banks last Friday and Saturday in order to take advantage of the so-called credit holidays for August. So far, half a million applications have been received, Morawiecki said, according to the PAP agency.
An estimated two million families in Poland have financed their property with mortgage loans. Interest rates are mostly variable and depend on the prime rate, which has risen. Germany’s Commerzbank expects its Polish customers’ credit holidays to cost them between EUR 210 million and EUR 290 million by 2023.
