As reported by “Rzeczpospolita”, The typical mortgage repayment period in Poland is currently approximately nine years. This change is mainly due to rapidly rising wages and the continuing reservation among compatriots towards long-term financing of purchases.
Although most borrowers decide on timetables ranging from 25 to 35 years when signing the contract, their main goal is to reduce the amount of the monthly installment at the beginning. However, the actual pace of closing liabilities is increasingly different from the formal provisions of contracts. Data from the Polish Bank Association, cited by the daily, show a clear trend of shortening this period.
Shortening the mortgage repayment time
A decade ago, borrowers needed an average of 17-18 years to close a home loan. After the pandemic period, this indicator dropped to 12-13 years, and in the last 2-3 years it stopped at 9-10 years. The change in lending behavior therefore occurs in a relatively short period of time.
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Poles close more loans than they take out
Even though banks have granted over 670,000 in recent years. new housing loans, the total number of active contracts decreased by 225 thousand. Calculations presented by “Rzeczpospolita” show that in the analyzed period, Poles closed over 896,000. mortgage obligations. This difference reflects the widespread phenomenon of early repayments and overpayments.
Jarosław Sadowski, director of the analysis office of the Rankomat.pl portal, explains in an interview with the newspaper that these numbers are based on well-thought-out financial tactics of borrowers. At the beginning, they deliberately choose the longest possible schedule, because purchasing an apartment involves large expenses for renovation and equipment. Young families then face many parallel costs.
Financial strategy of borrowers
The situation changes after passing this most demanding stage. Borrowers then begin to strive to reduce their debt as quickly as possible. The expert emphasizes that as one's career progresses, earnings also increase, thanks to which the installment is no longer such a burden on the household budget.
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Mortgages in Poland are approaching Western standards
Sadowski points out that the repayment rate varies greatly from person to person. Some people get rid of their debt even faster than in 9 years, others need a dozen or so years, and some repay their housing loan throughout the entire contractual period. Despite these differences, a clear direction of change is visible – the Polish market is becoming similar to the reality observed abroad, where the average life expectancy of a mortgage loan is approximately 7 years.
