Higher own contribution is one of the factors that may affect lending in 2016. However, it turns out that getting a loan of 10 percent. own contribution is still possible. However, borrowers and banks will face more threats and risks that will have a greater negative impact on the market than the increased own funds requirements.
Pursuant to Recommendation S of the Polish Financial Supervision Authority, the amount of credit granted in 2016 may not be higher than 85 percent. property values. In practice, this means the need to contribute 15 percent. own contribution. This is a level 5% higher than in the previous year. However, it is worth remembering the additional possibilities offered by the regulations. Pursuant to the provisions of the Recommendation, it is possible to grant a loan of up to 90 percent, i.e. from 10 percent. own contribution, provided that additional insurance is applied or other collateral provided for in the regulations. Recommendation S clearly lists what kind of safeguards are acceptable. Collateral in the form of a blockage of funds on a bank account is possible, a pledge on securities issued by the National Bank of Poland or the State Treasury is also allowed, as well as collateral on the borrower’s funds accumulated in the Individual Pension Account (IKE) or Individual Pension Security Account (IKZE). So as you can see, contrary to many opinions, in 2016 it is still possible to grant loans from 10%. own contribution. The recommendation allows the option of using low own contribution insurance or specific collateral, but it is up to the crediting bank to make the final decision as to which hedging instruments will be used.
10% loan deposit in 10 banks
For further lending with a minimum of 10 percent. 10 institutions decided to make their own contribution, including the largest banks on the market. However, it is worth noting that in most banks obtaining a loan with such a small own contribution is possible only after the borrower joins the insurance of a low own contribution. Virtually no bank accepts the other collateral provided for in Recommendation S. The exception is Bank Oro Bank , which, unlike other banks, will secure securities or funds on IKE or IKZE, but does not allow its clients to insure the missing amount. Thus, almost always, when applying for a loan in excess of 85 percent. the value of real estate will be necessary for banks to take out insurance. It is also worth paying attention to the cost of this insurance, because, for example, in BZ WBK, the borrower does not incur any additional fees in this respect.
Bank tax much more dangerous than the required contribution
Will increased own contribution affect the credit market? This question has been asked for almost 3 years, when the first proposal of Recommendation S appeared and it became certain that the era of loans without own contribution is coming to an end. Many predicted a collapse in 2014, when 5 percent was required. own contribution, similarly misinterpreted the market in 2015 when twice the own contribution was required. This year, the market will not be threatened by a larger own contribution, but other factors inhibiting lending. The most important is the banking tax, which may cause restrictions in the financing of housing transactions in several banks. Increasing capital requirements, payments to the Bank Guarantee Fund or Borrowers’ Support Fund may cause a decrease in lending.