On Tuesday, March 14, the government has approved a draft of a legislation on the 2% Safe Credit program.

The document is currently being worked on by the Polish Parliament. The government assumes that the program will start as early as July this year and will help many young people buy their first home or apartment. What do we currently know about the program?

The “First Apartment” program will consist of two solutions:

2% loan – according to the bill, the program will provide subsidies for the first 10 years of the loan. The borrower, regardless of which offer he chooses, will have to pay 2% plus a margin to the respective bank. The remaining costs will be covered by the state BGK, or Bank Gospodarstwa Krajowego. After 10 years, the borrower will have to pay the entire installment resulting from the current interest rate. The purchase of real estate will apply to both secondary and primary markets.

Housing Account – the second part of the program involves the possibility of saving for one’s own apartment on preferential terms.

The “2 percent credit” program

The program will be aimed at people up to the age of 45, with married couples only needing this condition to be met by one borrower. A condition for taking advantage of the program will also be not owning one’s own residential property currently or in the past. The government expects the program to benefit up to 100,000 borrowers in the next three years. If the number of beneficiaries is too high, the government may introduce limits on participation in the program.

The amount that borrowers will be able to apply for is expected to be a maximum of 500,000 for a single borrower and 600,000 for married couples and families with children. The maximum own contribution that can be made is to be PLN 200,000. In such a situation, the maximum amount of real estate purchase should be within PLN 800,000.

It is important to note that in the “2% credit” program there will be no price limits per square meter, as in previous programs. The loan is to be provided solely on the basis of a 10-year fixed interest rate and in decreasing installments. This means that for the first 10 years of repayment, the interest rate on the loan will be at the same level and the installments, by being decreasing, will gradually decrease in value.

Currently, the government anticipates that the program will be available until 2027, but does not rule out extending it.

What conditions will have to be met to get a secure 2% loan?

At the moment, we assume that the loan will be obtainable if:

  • the borrower must have a creditworthiness adequate to the amount of the loan he wants to obtain,
  • the borrower and the persons entering his household do not have and have not had the right of ownership of a dwelling or a single-family house, unless the right is for a total of no more than 1/2 share in one dwelling or house, has been inherited, and the borrower does not reside at that address,
  • the borrower and the persons in his household do not have and have not had a cooperative right to a dwelling or a single-family house, unless the right is for a total of no more than 1/2 of the share in one dwelling or house, was inherited, and the borrower does not reside at that address
  • the borrower is under 45 years of age, except that if the loan is taken out jointly by spouses or parents of at least one common child, it is sufficient that 45 years of age is under one of them
  • the borrower and the members of his household are not parties to a contract for another loan granted for the purpose of acquiring ownership of a dwelling or single-family house or a cooperative right concerning a dwelling or single-family house.

Will the interest rate on the loan be fixed?

Support will be provided for loans with a periodically fixed interest rate.
During the period of application of subsidies to the installments of this loan (the first 10 years of repayment), the effective interest rate of the loan from the perspective of the borrower will be 2% + the bank’s margin.

How much is the interest rate on the loan?

During the period of application of subsidies to the installments of this loan (the first 10 years of repayment), the interest rate on the loan will be 2% for the borrower plus the bank’s margin, commission and other bank fees (if charged).

Will there be limits on the price per m2 of housing?

There will be no limit on the price per square meter of housing. Only the maximum amount of credit that can be granted under the program has been specified – it is respectively:

PLN 500 thousand for a single

PLN 600 thousand for spouses or people raising at least 1 child in the household

Will it be possible to combine the loan with the Housing without contribution program?

Yes, it is envisaged that it will also be possible to grant a loan with subsidy rights to borrowers who have not accumulated funds for their own contribution.

Will additional loan costs be incurred in addition to the loan interest rate?

Housing loans with the right of subsidy will be granted by commercial banks that will sign an appropriate agreement with Bank Gospodarstwa Krajowego. Therefore, in addition to a lower interest rate, the loans will not differ from the market offer.

The “housing account” program”

The program involves having a special savings account with preferential terms. The requirement for using the account will be to regularly fund it on a monthly basis with an amount between PLN 500 and PLN 2,000.If the borrower meets the conditions, the government will subsidize the account with a so-called “housing bonus”.Such a subsidy will be added once a year, but paid out only when the borrower finishes saving. The savings will not be taxed with a 19 percent capital gains tax.

In order to take advantage of the program, you will have to meet conditions. One of them is not to own an apartment currently or in the past. The exception will be apartments with a small area not exceeding 50m2 for those with two children, 75m2 for those with three children, 90m2 with four children. No limits will apply to borrowers with more than four children. The program will be available from the age of 13. Once a year it will be possible not to fund the account with proceeds.

The funds collected will be able to be used to purchase real estate within 5 years of the end of saving. If the funds are not used to purchase real estate, the government subsidy will be forfeited and a 19 percent tax on profits will have to be paid.

If you are interested in the program and developments, you can keep an eye on us, so you will be kept informed of changes and news. We also encourage you to contact us and schedule a free credit consultation so that you are best prepared before the program goes into effect.