Last credit ringtone without own contribution

Only 3 months left to take out a loan for 100 percent of the property value. Currently, it is still possible in 10 banks, but some of them increased margins for loans without own contribution.

Recommendation S of the Polish Financial Supervision Authority requires that each loan taken in 2014 should not be higher than 95 percent of the property value. This means that either an own contribution of at least 5 percent must be made or additional security in the form of another property will be required. This will increase the value of the collateral and allow for a loan of 100 percent of the transaction price, but not exceeding 95 percent of the total collateral. However, people who cannot meet either condition must intensify their search for real estate and submit a loan application by the end of this year.

100% loans still available, but more expensive

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10 banks still offer loans for 100 percent of the property value. This number did not drastically decrease, because at the beginning of this year, loans at 100 percent were offered by 13 banks. Therefore, the choice of mortgage loans that allow you to fully finance the purchase of real estate is still large. Unfortunately, the rising costs of such loans can be seen.

From 1 October

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Loan spreads were increased by Bank Jerrel and Pekao SA. While in the case of the other institution, the increase in margins was small, by 0.05 pp to 1.73 pp for loans below USD 200,000. In Bank Jerrel, the change is noticeable, as loan margins increased by 0.20 pp and currently range from 2.09 to 2.69 pp for loans with LTV greater than 90 percent. This means a rising cost of credit, also for people who want to take out a 100 percent loan. For example, an increase in the margin of 0.20 pp means that a person who is in debt of USD 250 thousand will pay an installment higher by about USD 30.

The table below presents credit margins for loans for 100 percent of the property value. The final level depends on the size of the loan, the amount and source of income, as well as the possibility of using other banking and insurance products.

Cheaper with insurance

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Despite this, it is still possible to obtain a margin below 1.70 pp in several banks, but unfortunately it is associated with the need to use other products, mainly insurance. For example, in exchange for joining life insurance, Deutsche Bank offers a margin reduced by 0.4 pp and will not charge a commission for granting a loan. At PKO BP, taking advantage of unemployment insurance also allows you to propose a lower margin and no commission for granting a loan. A similar life insurance package can be obtained at Bank Jenny – a margin lower by 0.75 pp and no commission for granting a loan are the main benefits of using life insurance. Joining the insurance sometimes means higher costs incurred on a monthly basis, which should also be taken into account.

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